WTI gains ground above the $81.00 mark on a weaker US Dollar

• WTI gains ground near 81.00, adding 0.37% on the day. 
• OPEC+ voluntary production cuts and the Middle East geopolitical tensions might lift WTI prices. 
• Weaker economic growth in major countries might drag WTI prices lower.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $81.00 on Monday. WTI prices edge higher amid the softer US Dollar (USD) and the revised demand outlook from the International Energy Agency (IEA). 

The IEA forecast significantly less global oil production for the remainder of 2024 following the announcement that OPEC+ will extend the existing voluntary production cuts through the second quarter of 2024. The draw on stockpiles throughout 2024 might boost WTI prices. Furthermore, the uncertainties surrounding geopolitical tensions in the Middle East might increase prices further as many ships are rerouting to avoid the Red Sea, which lengthens the trip and increases costs.

On the other hand, weaker economic growth in major countries might lead to less oil demand and drag WTI prices lower. Market players will keep an eye on the US Gross Domestic Product Annualized (GDP) for the fourth quarter (Q4), due on Thursday. The annual US GDP growth numbers are projected to remain steady at 3.2% in the fourth quarter. 

The Federal Reserve (Fed) held rates steady at 5.25–5.50% for a fifth consecutive meeting last week. The Fed maintained its outlook for median dot for 2024 and signalled three quarter-point rate cuts this year. However, any hawkish comments and the higher-for-longer rate narrative from the central bank might cap the upside of the WTI prices as it translates to less demand for oil with higher costs.