WTI Crude Oil Trades Weaker: Central Banks, Middle East in Focus

At the start of a fresh trading week, WTI crude oil prices are trading lower over potential easing of tensions in the Middle East following Iran’s “constructive” meeting on a nuclear agreement with several parties. At the time of writing, WTI crude oil prices are trading at around $56 per barrel.

An emergency meeting conducted between Iran and other concerned parties who had signed the 2015 nuclear deal has led to some positive developments, even though some unresolved issues still remain. According to an Iranian official, Abbas Araqchi, “Discussions were good. I cannot say that we resolved everything, I can say there are lots of commitments”.

However, the situation in the Middle East continues to remain tense as Europe and US are looking into ways to beef up maritime security in the Strait of Hormuz. In addition, crude oil is expected to trade cautiously in anticipation of central banks’ meetings due to take place this week, especially that of the Bank of Japan and the Federal Reserve.

A dovish outlook by central banks can add further downward pressure on crude oil prices, which have remained weak lately over global economic slowdown concerns that are impacting demand for oil in markets worldwide.