WTI drops to near $77.00 due to increased ceasefire optimism between Israel and Hamas

• WTI price extends its losing streak due to increased optimism surrounding ceasefire negotiations in the Middle East.
• Israeli Prime Minister Benjamin Netanyahu has suggested that a ceasefire agreement might be taking shape.
• API Weekly Crude Oil Stock fell by 3.9 million barrels for the previous week, against an expected 2.47 million-barrel decrease.

West Texas Intermediate (WTI) Oil price continues to decline for the fifth successive session, trading around $77.00 per barrel during the Asian hours on Wednesday. This decrease probably follows a surge of optimism surrounding potential ceasefire negotiations between Israel and Hamas.

Israeli Prime Minister Benjamin Netanyahu has hinted that a ceasefire agreement, which could lead to the release of several hostages in Gaza, might be in the works. Netanyahu is currently in Washington to address Congress, according to The Associated Press.

Egypt, Qatar, and the United States (US) are working to broker a phased deal between Israel and Hamas to halt the fighting and secure the release of remaining hostages. Meanwhile, in China, Palestinian factions Hamas and Fatah have signed a declaration to form a unity government and resolve their long-standing rift.

However, crude Oil prices found some support from declining US crude inventories. On Tuesday, the American Petroleum Institute (API) reported a drop of 3.9 million barrels in Weekly Crude Oil Stock for the week ending July 19, exceeding market expectations of a 2.47 million-barrel decrease. This follows a previous decline of 4.44 million barrels. The US Energy Information Administration’s (EIA) Crude Oil Stocks Change report, scheduled for Wednesday, is anticipated to show a 0.7 million-barrel increase for the same period.

The US Dollar (USD) faces challenges due to rising bets on a Federal Reserve (Fed) rate cut in September. According to CME Group’s FedWatch Tool, markets now indicate a 93.6% probability of a 25-basis point rate cut at the September Fed meeting, up from 88.5% a day earlier.

A weaker US Dollar could make oil cheaper for buyers using other currencies, potentially boosting demand for the commodity. Additionally, lower interest rates could stimulate economic activity in the United States, the world's largest Oil consumer, which may help support Oil prices.

Traders await the data release of the US Purchasing Managers Index (PMI) data on Wednesday and the Gross Domestic Product (GDP) Annualized (Q2) figures on Thursday. These figures are expected to provide new insights into the economic conditions of the United States.