WTI advances to $71.00 mark, over two-week high amid broad-based USD weakness

• WTI jumps to over a two-week high on Wednesday amid the emergence of fresh USD selling.
• The Fed's oversized rate cut, along with a positive risk tone, undermines the safe-haven buck.
• Concerns about slowing global fuel demand might cap any further gains for Crude Oil prices.

West Texas Intermediate (WTI) US crude Oil prices regain positive traction after Wednesday's modest pullback and build on the recent recovery from the $64.75 area or the lowest level since May 2023 touched last week. The buying interest remains unabated through the first half of the European session and lifts the commodity to over a two-week high, closer to the $71.00 mark.

The Federal Reserve's (Fed) decision to start its policy easing cycle by lowering borrowing costs by 50 basis points on Wednesday fueled optimism over a pickup in economic activity and energy demand. This, along with the emergence of fresh US Dollar (USD) selling, turn out to be key factors pushing Crude Oil prices higher. Furthermore, the risk of a further escalation of tensions in the Middle East, especially after walkie-talkies used by the Lebanese armed group Hezbollah exploded on Wednesday, acting as a tailwind for the commodity. 

Meanwhile, government data released on Wednesday showed a bigger-than-expected draw in US crude inventories, though was offset by builds in distillates and gasoline stockpiles. Adding to this, lingering concerns about weak global demand might cap any further appreciating move for Crude Oil prices. In fact, both the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) lowered their demand growth forecasts earlier this month amid persistent worries about a slowdown in China. 

The concerns resurfaced following the release of poor Chinese macro data over the weekend, which pointed to signs of weakness in the world's largest economy and top Oil importer. This, in turn, warrants some caution for aggressive bullish traders and before positioning for an extension of the upward trajectory witnessed over the past week or so. Traders now look forward to the US macro data - Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index and Existing Home Sales data - to grab short-term opportunities.