Middle East Risks Keep WTI Crude Oil Above $88 Amid Fed Uncertainty

WTI crude oil prices are trading near $90, supported by Middle East tensions and OPEC+ discipline. The geopolitical risks in the region have led to a surge in oil prices, with the Red Sea and Hormuz Strait being particularly concerning areas for supply disruptions.

The US crude inventories have been decreasing, while production is nearing all-time highs. However, US producers are choosing to prioritize capital discipline over expansion, which may limit drilling activity.

The upcoming Federal Reserve meeting on July 29-30 will be closely watched by the market, as a prolonged high interest rate forecast could negatively impact global fuel demand. If the Fed maintains its 'higher-for-longer' rate stance, fuel demand may suffer, putting downward pressure on WTI oil prices.