Tuesday, 26 August 2025
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WTI edges higher above $64.50 amid supply concerns, potential US Fed rate cut
Tuesday, 26 August 2025 07:29 WIB | OIL |Oil,

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.60 during the early Asian trading hours on Tuesday. The WTI extends the rally due to a pause in negotiations for a peace deal between Russia and Ukraine. Traders await the American Petroleum Institute (API) weekly crude oil stock data, which is due later on Tuesday.

The latest drone strikes by Ukraine on Russian energy facilities have heightened concerns about oil supply disruptions, boosting the WTI price. Russian officials said that Ukraine carried out a drone attack on Russia on Sunday, causing a significant fall in reactor capacity at one of the country's largest nuclear power facilities and a massive fire at the Ust-Luga fuel export terminal. US President Donald Trump reiterated threats of sanctions if progress on a Ukraine peace deal is not made within two weeks.

Furthermore, signals of potential rate cuts from the US Federal Reserve (Fed) might weigh on the US Dollar (USD) and lift the USD-denominated commodity price, as it makes oil cheaper for holders of other currencies. Fed Chair Jerome Powell said on Friday at the Jackson Hole symposium that the US central bank is likely to cut interest rates as soon as its next policy meeting in September.

Powell further stated that the US economy is facing a "challenging situation," with inflation risks now tilted to the upside and employment risks to the downside. Market expectations for a September rate cut rose to nearly 84%, up from around 75% the previous week.

Source: FXstreet

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