WTI hovers around $62.50, downside appears due to OECD’s revision of GDP forecasts

• WTI price may struggle as the Organization for Economic Co-operation and Development has revised down forecasts of the global economy.

• The OECD has cut down its global GDP growth forecast to 2.9% from 3.1% previous estimations.

• Oil prices may struggle as dollar-denominated commodities become expensive for holders of other currencies amid an improved US Dollar.

West Texas Intermediate (WTI) Oil price remains steady after registering more than 3.50% gains, trading around $62.50 during the Asian hours on Tuesday. However, Crude Oil prices faced a few challenges, potentially weighed down by the Organization for Economic Co-operation and Development (OECD) cutting down forecasts of the global economy.

The OECD has revised its global GDP growth forecast for the current year to 2.9% from 3.1% previous estimations. The next year global GDP growth forecast has been slightly declined to 2.9% against the previous 3.0%. Meanwhile, the United States (US), the largest Oil consumer, is expected to grow by 1.6% in 2025 versus 2.2% prior and by 1.5% in 2026, slightly lower than the previous estimation of 1.6%.

Moreover, Oil prices may face challenges as dollar-denominated commodities become expensive for holders of other currencies due to a technical upward correction in the Greenback. The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, has rebounded from a six-week low of 98.58 and is trading higher near 98.90 at the time of writing.

However, Oil prices gained ground as ongoing geopolitical tensions boost concerns over a tighter global supply. Iran is prepared to reject a US nuclear deal proposal that would be key to easing sanctions on the Oil producer. Moreover, the second round of Russia-Ukraine peace talks, on Monday, yielded no significant progress in resolving the three-year-long conflict following a surge in hostilities on Sunday.

Reuters reported that refiners worldwide are earning unexpected profits from producing key fuels in recent weeks. This has supported a struggling sector ahead of an anticipated downturn later this year, as plant closures have tightened fuel supply needed to meet peak summer demand.

Oil prices surged after a lower-than-expected supply hike from the group OPEC+, the Organization of the Petroleum Exporting Countries and its allies. The Oil group decided to raise output by 411,000 barrels per day (bpd) in July by the same amount for the third successive month.