Crude oil rebounded and stabilized near its two-month highs due to expectations of crude inventory declines and rising geopolitical tensions in the Middle East.
Brent crude futures climbed near the $85 per barrel mark, while WTI crude rebounded above the $81 per barrel level.
Geopolitical risks in the Middle East have contributed to the bullish momentum in addition to attacks on Russian oil facilities by Ukrainian drones.
At the same time, uncertainty surrounding potential Federal Reserve interest rate cuts has added to oil price volatility, while weak US consumer confidence data raised concerns about economic prospects and fuel demand amidst a slow start to the summer driving season.
This decline in consumer confidence, despite positive labor market sentiment and expectations of easing inflation, has tempered optimism and potentially impacted gasoline demand. Investors are also turning their attention towards the upcoming release of the US GDP for the first quarter, which is expected to expand at only 1.3% quarter-on-quarter, significantly lower than the previous reading of 3.4%.
A potential slowdown of the US economy could suggest weaker demand for oil in the medium term, which could limit crude oil upside
