WTI consolidates around mid-$74.00s amid US recession jitters/Middle East tensions

• WTI struggles to attract follow-through buying amid mixed fundamental cues.
• Concerns about an economic downturn in China and the US act as a headwind.
• Escalating geopolitical tensions in the Middle East to continue lending support.

West Texas Intermediate (WTI) US crude Oil prices struggle to capitalize on the previous day's strong move up and oscillate in a narrow range during the Asian session on Thursday. The commodity currently trades just above mid-$74.00s, nearly unchanged for the day, and for now, seems to have stalled its recovery from the lowest level since January touched earlier this week.

Investors remain concerned about an economic downturn and slowing demand in China – the world's top oil importer. Adding to this, the incoming softer US macro data suggested that the world's largest economy was slowing faster than initially expected, which is further expected to dent fuel demand. This, in turn, holds back traders from placing aggressive bullish bets around Crude Oil prices and caps the upside, though geopolitical risks could act as a tailwind.

Meanwhile, a possible attack by Iran, and its allies, in retaliation to the assassination of Hamas chief Ismail Haniyeh in Tehran and the subsequent Israeli response could lead to a broader conflict in the Middle East. This keeps the risk of supply disruptions from the key Oil producing region and continues to offer some support to Crude Oil prices. Adding to this, a steep draw in US crude stockpiles should contribute to limiting any meaningful downside for the black liquid.

In fact, the US Energy Information Administration (EIA) reported on Wednesday that crude inventories fell for a sixth week in a row by 3.7 million barrels, more than market expectations. That said, Chinese trade data released the previous day showed that July's daily crude oil imports fell to the lowest level since September 2022. The mixed fundamental backdrop makes it prudent to wait for strong follow-through buying before confirming that the commodity has bottomed out.