FX.co ★ Crude Oil Pares Losses

On Wednesday, West Texas Intermediate (WTI) crude oil futures lingered below $57 per barrel as expectations of increased supply from Venezuela and Russia exerted downward pressure on prices. This was partially mitigated by U.S. labor data, which bolstered the outlook for further Federal Reserve rate cuts, thus providing some support for demand projections. The ADP report indicated a modest recovery in private sector employment for December, aligning with forecasts and consistent with a labor market characterized by both cautious hiring and restrained layoffs, suggesting continued policy easing may be viable this year. Market attention remained fixed on President Donald Trump's announcement regarding Venezuela's intended transfer of 30 to 50 million barrels of crude oil to the U.S., which is perceived as a factor potentially increasing supplies to the world’s largest oil consumer. Additionally, advancements toward a U.S.-Ukraine security accord have raised hopes for fewer restrictions on Russian crude exports. Offering some relief from supply concerns, the American Petroleum Institute (API) reported a 2.8 million barrel decrease in U.S. crude inventories last week, contrary to the forecasted increase of 1.2 million barrels.