WTI consolidates gains near $82.00 amid hope for strong summer driving demand

• WTI hovers around $82.00 amid the softer US dollar on Tuesday. 
• The renewed hopes of a summertime upswing in fuel demand and geopolitical risks support the WTI price. 
• The expectation that the Fed will delay the rate-cutting cycle might drag the black gold lower. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $82.00 on Tuesday. The rise of the WTI price is bolstered by the hope for a strong summer driving demand and oil supply concerns amid the ongoing geopolitical tensions in the Middle East. 

Summer demand is likely to drive the WTI price higher. JPMorgan reported that global oil demand has increased by 1.4 million bpd this month, supported by robust summer travel across Europe and Asia.

Geopolitical risks in the Middle East and Ukraine could endanger crude flows from the region, which also underpin the WTI price. TD Securities’s senior commodity strategist, Ryan McKay, said that supply risks are now back in focus as tensions are building on the Israel-Lebanon border. Israeli Prime Minister Benjamin Netanyahu stated that the most intense phase of the assault against Hamas in Gaza is close to ending while stressing the broader war against Hamas wages on, per CNN. Meanwhile, Ukraine President Volodymyr Zelenskyy stated Monday that Kyiv attacked around 30 Russian oil refineries, terminals, and bases, but did not provide a time range for the strikes.

On the other hand, the stronger US Dollar (USD) and the hawkish stance of Federal Reserve (Fed) officials might weigh on the black gold. San Francisco Federal Reserve Bank President Mary Daly said on Monday that she does not believe the Fed should cut rates before policymakers are confident that inflation is headed towards 2%. Higher interest rates generally weigh on WTI prices as it increases the cost of borrowing, which can dampen economic activity and oil demand.