WTI Oil remains depressed below $65.00 on easing supply concerns

• The Middle East ceasefire halted concerns over supply and triggered a 16% decline in Oil prices.
• With geopolitical fears out of the way, the prospects of a weaker demand are weighing on Crude prices' recovery.
• A hawkish Fed Powell in Tuesday's testimony to Congress added negative pressure on prices.
  

Crude Oil is consolidating losses on Wednesday, after having depreciated more than $10 from Monday's highs. The ceasefire in the Middle East has eased concerns about an Oil supply disruption, which keeps the price of the barrel for the US benchmark WTI capped below the $65.00 level.

The Truce between Israel and Iran seems fragile, but is holding for the second day. Iran's Oil supply capacity does not seem to have been affected by Israel's bombings, and the threat of a blockade of the key Strait of Hormuz gateway has been pushed away for now. All these circumstances have contributed to bringing prices back to pre-war levels.

Market concerns about weak Oil demand remain alive

Apart from that, concerns about demand remain alive. The US economy keeps showing signs of slowdown. Consumer confidence deteriorated in June, according to data released on Tuesday, which confirmed the grim picture anticipated by previous macroeconomic releases.

The Eurozone is stagnating, and China's recovery seems elusive. In this context, the OPEC+ countries' plans to keep hiking supply might lead to an Oil glut.

Also on Tuesday, Fed Chairman Jerome Powell refused to signal any rate cut in the near term as he said, upside risks on inflation stemming from Trump's tariffs remain high. The restrictive Fed policy is weighing on economic activity and demand for Oil, adding negative pressure on prices.

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