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• WTI consolidates after the overnight pullback from a nearly three-month high.
• Concerns about weak demand from China and rising oil supply cap the upside.
• Worries about tighter Russian and Iranian supply support to the commodity.

West Texas Intermediate (WTI) US Crude Oil prices struggle for a firm intraday direction on Tuesday and oscillate in a narrow trading band, below the $73.00 round figure through the early European session. The commodity, for now, seems to have stalled its retracement slide from the vicinity of mid-$74.00s, or a nearly three-month top touched on Monday amid mixed fundamental cues. 

Concerns about weak demand from China – the world's top oil importer – and the rising supply from non-OPEC countries turn out to be key factors acting as a headwind for the black liquid. Furthermore, the volume of global crude exports declined in 2024 for the first time since the COVID-19 pandemic. This, along with expectations that slower rate cuts by the Federal Reserve (Fed) in 2025 could dent fuel demand, contribute to capping Crude Oil prices. 

That said, worries about tighter Russian and Iranian supply, amid widening Western sanctions checked losses, should continue to offer support to Crude Oil prices and help limit any meaningful downside. This, in turn, makes it prudent to wait for strong follow-through selling before confirming that the recent positive move witnessed over the past month or so has run out of steam and positioning for any further depreciating move in the commodity. 

Traders might also opt to wait on the sidelines ahead of this week's release of the FOMC minutes and the closely-watched US Nonfarm Payrolls (NFP) report on Wednesday and Friday, respectively. This will play a key role in influencing the near-term US Dollar (USD) price dynamics, which, in turn, should provide some meaningful impetus to the USD-denominated commodities and help determine the next leg of a directional move for Crude Oil prices.

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