That said, it takes time for an aircraft carrier to travel from one part of the world to another, so traders have some time to evaluate whether Iran would agree to a deal or reject it.
Today, oil traders also focused on inflation data from the U.S. Inflation Rate declined to 2.4% in January, compared to analyst forecast of 2.5%. Lower-than-expected inflation provides Fed with an opportunity to cut rates, which would boost economic growth.
However, traders may stay focused on the supply side of the supply/demand balance. In case geopolitical premium declines, oil prices may gain significant downside momentum as supply continues to grow at a faster pace than demand.
Most likely, a rate cut from the Fed would not provide sufficient support to oil demand in the near term, so it’s not surprising to see that oil markets showed little reaction to U.S. CPI data.
WTI oil made an attempt to settle below the $62.50 level but lost momentum and rebounded towards the $63.00 level. In case WTI oil settles back above $63.00, it will head towards recent highs near the $65.50 level.
On the support side, a move below the $62.50 level will open the way to the test of the support at $60.00 – $60.50.
