WTI crude oil edged higher to $67.57/bbl, supported by tightening supply but capped by Fed policy risks. OPEC+ production cuts and falling U.S. inventories buoyed prices, though gains were limited as traders priced in a 97.6% chance of unchanged Fed rates in June (per CME FedWatch). A stronger dollar, fueled by delayed rate-cut expectations, weighed on dollar-denominated crude.
The July Fed meeting remains a focal point, with only 19.1% odds of a 25bps cut. While summer demand optimism offers upside, prolonged high rates could dampen economic growth and oil consumption. Geopolitical tensions and inventory data may drive near-term volatility, but macro uncertainty keeps prices range-bound.
Key levels to watch: 65 support. A break higher would require either surprise Fed dovishness or sustained supply disruptions, while weaker demand signals or hawkish Fed rhetoric could trigger a retest of June lows.
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