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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $56.30 during the early European trading hours on Thursday. The WTI price declines amid a modest rebound in the US Dollar (USD) and signs of weak Chinese energy demand. 

The Greenback recovers some lost ground amid cautious comments from the Federal Reserve (Fed) officials this week, which weigh on the USD-denominated commodity price. Fed Governor Christopher Waller on Wednesday backed further interest-rate cuts to get the central bank’s setting back to neutral, per Bloomberg. However, Waller also warned there’s no need to rush amid elevated inflation. 

Additionally, Atlanta Fed President Raphael Bostic said on Tuesday that he did not believe the decision to reduce rates last week was warranted, and he had projected no more rate cuts next year. 

Soft Chinese economic data released earlier this week fueled concerns about global energy demand, as China is the world’s largest crude importer. China’s Retail Sales rose 1.3% YoY in November, compared to 2.9% in October, according to the National Bureau of Statistics (NBS) on Monday. This figure came in weaker than the market expectation of 2.9%. The country’s Industrial Production climbed 4.8% YoY in the same period, versus 5.0% forecast and 4.9% prior. 

On the other hand, the US blockade of Venezuela might cap the downside for the WTI. US President Donald Trump said the US will block sanctioned tankers from entering and leaving Venezuela. The Venezuelan government on Wednesday ordered its Navy to escort ships carrying petroleum products from port, escalating the risk of a confrontation with Trump ordered a “blockade” aimed at the country’s oil industry.

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