WTI declines to near $76.00, driven by easing supply concerns, rising US Oil inventories

• WTI price faces challenges due to easing supply fears over Middle East tensions.
• US President Joe Biden suggested that Iran might refrain from attacking Israel if a cease-fire in Gaza is achieved.
• EIA Crude Oil Stocks Change increased by 1.357 million barrels for the previous week, ending a six-week decline.

West Texas Intermediate (WTI) Oil price extends losses for the third successive session, trading around $75.90 during the Asian session on Thursday. Crude Oil prices depreciate following the easing supply fears over geopolitical tensions in the Middle East.

On Wednesday, Reuters reported that US President Joe Biden suggested Iran might refrain from attacking Israel if a cease-fire is achieved in Gaza. New cease-fire talks are scheduled to begin on Thursday in Qatar, though Hamas has stated it will not participate in the negotiations.

The EIA Crude Oil Stocks Change also reported an unexpected increase in US Oil inventories, which rose by 1.357 million barrels for the week ending August 9. This marked the end of a six-week decline and defied expectations of a 2.0 million-barrel drop. The previous week's decline was 3.728 million barrels.

However, the downside of the Oil prices could be restrained as expectations of a rate cut by the US Federal Reserve (Fed) in September. Lower interest rates may boost economic activity in the United States (US) and fuel Oil demand.

Wednesday's Consumer Price Index (CPI) data showed a moderate increase in July's annual US inflation rate sparking debate on how much the Federal Reserve (Fed) will cut rates in September. While traders are leaning toward a more modest 25 basis point reduction, with a 60% probability, a 50 basis point cut remains a possibility. According to CME FedWatch, there is a 36% chance of the larger cut occurring in September.

However, crude Oil prices are expected to remain under pressure due to ongoing concerns about sluggish global demand, particularly from China. Additionally, jet fuel demand is likely to soften as reduced consumer spending impacts travel budgets, which could further weigh on Oil prices in the coming months, per Reuters.