WTI crude eases toward $100 as Fed, ECB, BoJ decisions loom
WTI crude oil has pulled back from a five-month high of $103.28 to near $100 a barrel as traders turn cautious ahead of a week of central bank meetings.
The pullback in West Texas Intermediate (WTI) futures comes after a sharp run-up last week, driven by fears of renewed tension between the United States and Iran. Sentiment soured further after the US State Department called for a broader pullback of American diplomatic staff from the Gulf region.
Attention is now turning to a trio of rate decisions: the US Federal Reserve (Fed) on Wednesday, the European Central Bank (ECB) on Thursday, and the Bank of Japan (BoJ) on Friday. Danske Bank said it expects all three institutions to hold rates steady this week before resuming hikes later in the year, a pause that has encouraged some profit-taking in oil after its recent rally.
Despite the near-term dip, TD Securities said crude remains tilted toward further gains, pointing to heightened escalation risk around upcoming Israeli elections and US midterm elections. The firm noted that recent Houthi attacks have lifted the geopolitical risk premium priced into the market, while repeated Iranian strikes on tankers appear to have curbed some flows through the Strait of Hormuz.
On the charts, WTI was trading at $100.51, holding above its 20-day Exponential Moving Average near $95.68, a level analysts flagged as a potential support zone. The Relative Strength Index stood at 62.99, indicating positive but not overheated momentum.
Oil prices are a key input for global inflation expectations and energy-linked currencies such as the Canadian dollar. Any further escalation in Middle East tensions or supply disruption through the Strait of Hormuz could keep crude prices elevated, while this week’s central bank decisions will shape broader expectations for the US dollar and interest-rate-sensitive assets.
Source: FXStreet