WTI crude oil has seen a mild pullback in recent sessions but continues to hover near six-week highs, holding above the $75 mark. While the recent strength in the US Dollar has capped further upside, several fundamental and geopolitical factors are keeping downside attempts limited.
Dollar Gains Weigh on Oil
The US Dollar Index rose nearly 0.7% after stronger-than-expected job openings data, reflecting continued resilience in the US labor market. A stronger dollar typically pressures commodities like oil, making them more expensive for holders of other currencies. This move has triggered a moderate correction in WTI after its sharp 3.5% rally earlier this week.
Supply Concerns Offer Support
Despite the dollar pressure, oil prices remain supported by growing supply concerns. Ongoing wildfires in Canada have disrupted around 344,000 barrels per day, or nearly 7% of the country’s oil production. Meanwhile, geopolitical tensions—particularly the stalled US-Iran nuclear talks and the unresolved conflict between Russia and Ukraine—are preventing any substantial easing in global supply risks.
Outlook
WTI crude appears to be consolidating within a tight range, caught between bullish supply-side risks and bearish macroeconomic pressure from a strong US dollar. If geopolitical risks escalate or supply disruptions persist, oil could make another attempt to break higher. However, without a fresh catalyst, prices may remain range-bound in the short term.
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