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Prices for US crude oil West Texas Intermediate (WTI) struggle to capitalise on the previous day\u2019s strong move up and oscillating in a narrow range in early European trading on Thursday.<\/p>\n
The commodity currently trades around the $78.00 mark, with bulls awaiting a sustained strength beyond the 200-day Simple Moving Average (SMA) before positioning for any further gains.<\/p>\n
Against the backdrop of Israel\u2019s retaliation against Iran-backed Lebanese group Hezbollah, the killing of Hamas leader Ismail Haniyeh in Tehran keeps the risk of a broader Middle East conflict in play.<\/p>\n
This, in turn, raises worries about supply disruptions from the key oil producing region, which, along with data showing US inventories shrank more than expected for a fifth week in a row, acts as a tailwind for the black gold.<\/p>\n
The Energy Information Administration (EIA), in its report on Wednesday, stated that crude oil inventories in the US went down by 3.4 mln barrels to 433.0 mln barrels during the week ending July 26.<\/p>\n
The reading was more than consensus estimates for a decline of 1.6 mln barrels and pointed to strong fuel demand. That said, China\u2019s economic woes keep a lid on any meaningful upside for crude oil prices.<\/p>\n
Apart from this, the emergence of some US Dollar buying turns out to be another factor holding back traders from placing fresh bullish bets around the USD-denominated commodity.<\/p>\n
Meanwhile, a goodish USD recovery from a three-week low runs the risk of fizzling out rather quickly amid the Federal Reserve\u2019s dovish outlook. This suggests that the path of least resistance for crude oil prices is to the upside.<\/p>\n
(Source: OANDA)<\/p>\n","protected":false},"excerpt":{"rendered":"