WTI advances to two-week high, above $68.00 amid Middle East tensions and China optimism

• WTI draws some support from rising geopolitical tensions in the Middle East. 
• The optimism over China's stimulus measures further benefits the black liquid.
• Concerns about a slowdown in the global economy might cap the commodity.

West Texas Intermediate (WTI) US Crude Oil prices attract buyers for the third straight day on Tuesday and touch a fresh two-week high during the first half of the European session. The commodity currently trades just above the $68.00 mark, up over 1.25% for the day, and seems poised to climb further amid rising Middle East tensions.

US President Donald Trump vowed to continue the assault on Yemen's Houthis unless they end their attacks on ships in the Red Sea and warned that he would hold Iran responsible for any attacks carried out by the militant group. Adding to this, Israeli air strikes in Gaza ended a weeks-long standoff over extending a ceasefire. This raises the risk of a further escalation of the conflict in the region, which could impact supply, and act as a tailwind for Crude Oil prices. 

Furthermore, the latest optimism over China stimulus measures announced over the weekend turns out to be another factor that lends support to the black liquid. In fact, China's State Council unveiled a special action plan on Sunday aimed at stimulating domestic consumption and introduced measures to increase household incomes. Adding to this, China's Shenzhen eased its housing provident fund loan policies to stimulate the property market and clear the overhang. 

This is expected to boost fuel demand in the world's biggest crude importer and supports prospects for further appreciation for Crude Oil prices. That said, the Organization for Economic Co-operation and Development (OECD) lowered its global growth outlook amid worries about Trump's tariffs. This could weigh on global energy demand and hold back traders from placing aggressive bullish bets around the commodity ahead of this week's key central bank event risk.

The Federal Reserve (Fed) is scheduled to announce its decision at the end of a two-day policy meeting on Wednesday. Investors will look for cues about the central bank's rate-cut path, which will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide a fresh impetus to the USD-denominated commodities, including Crude Oil prices. Nevertheless, rising geopolitical risks favor bullish traders and should continue to support the black liquid.