• WTI price trades close to a six-week high on multiple tailwinds.
• Firm Fed rate-cut prospects improve the Oil demand outlook.
• Geopolitical tensions in the Middle East and Europe have raised supply concerns.

West Texas Intermediate (WTI), futures on NYMEX, hold gains near fresh six-week high near $80.70 in Wednesday’s Asian session. The Oil price strengthens due to an improvement in expectations that the Federal Reserve (Fed) will start reducing interest rates from the September meeting and deepening tensions in the Middle East and Europe.

The CME FedWatch tool shows that traders see a 67% chance of the Fed reducing key rates in September. Traders are also pricing in two rate cuts, this one against one signaled by policymakers in their latest interest rate projections.

Increased confidence in investors for Fed rate cuts in September is the outcome of the soft United States (US) Consumer Price Index (CPI) report for May, which indicated that the progress in the disinflation process has resumed. Also, lower-than-expected growth in the US Retail Sales for May has boosted early rate-cut expectations. The Retail Sales data excluding automobiles- a measure of consumer spending- contracted for the second straight month by 0.1%.