Oil Traders Are Growing Cautiously Bullish

Oil Traders Are Growing Cautiously Bullish | OilPrice.com

In a week of turbulent trade, U.S. benchmark September West Texas Intermediate (WTI) crude oil futures have managed to hold their ground, indicating a potential higher finish for the week. Thursday's session saw WTI crude oil prices settling slightly higher, thanks to lower U.S. crude inventories and strong crude imports by China. However, the market sentiment remained somewhat restrained due to concerns about weaker demand outlook.

Throughout the year, the U.S. oil demand has been bolstered by encouraging economic data, low unemployment, and subdued inflation. These positive factors were a result of the U.S. Federal Reserve's assertive rate-hiking campaigns, which are expected to culminate with a 25-basis point increase to the 5.25%-5.50% range next week. Nevertheless, apprehensions loom over the potential impact of the upcoming rate hike on crude oil demand.

On Wednesday, prices faced a dip as U.S. inventories fell less than anticipated, leaving some market participants disappointed. One contributing factor to the smaller draw was lower-than-expected gasoline demand for this time of year. At the same time, China's economic recovery, post the COVID-19 curbs, is not meeting expectations. Despite a surge in China's oil imports by almost half in June, stock levels have risen to near all-time highs, with China pragmatically purchasing discounted Russian crude.

Amidst these challenges, the market witnessed signs of increased buyer interest. Oil prices broke above…