WTI drifts lower to $84.70, eyes on Gaza ceasefire talks, US CPI data

• WTI extends its downside near $84.60 on Wednesday.
• The bigger-than-expected build in US crude inventories weighs on the black gold. 
• The uncertainty over Gaza ceasefire talks and ongoing Middle East geopolitical tensions might cap the downside of WTI. 

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $84.60 on Wednesday. The black gold trades in negative territory for the fourth consecutive day amid the US crude stock build and profit-taking ahead of the release of the US March Consumer Price Index (CPI) report and the FOMC Minutes, due later on Wednesday.

The recent US employment report last week has triggered speculation that the Federal Reserve (Fed) might delay interest rate cuts this year. Investors will closely watch the US CPI inflation data for March, as it could offer some insights about the inflation trajectory and the path of the Fed’s monetary policy. The firmer-than-expected outcome might lift the US Dollar (USD) and weigh on the USD-denominated WTI price.

Furthermore, the bigger-than-expected build in US crude inventories exerts some selling pressure on WTI prices. US crude oil inventories for the week ending April 5 increased by 3.034 million barrels from the previous week's decline of 2.286M million barrels. The market consensus estimated that stocks would rise by about 2.415 million barrels, according to the American Petroleum Institute (API) on Tuesday.

The leader of Iran's Revolutionary Guard navy said that the Strait of Hormuz might be closed if necessary. About a fifth of the volume of the world's total oil consumption passes through the strait every day. This, in turn, might trigger the fear of oil supply disruption and cap the downside of WTI prices. 

On Tuesday, Hamas stated that an Israeli proposal for a ceasefire in their war in Gaza did not match the conditions of Palestinian militant groups, but that it would consider the offer further. Oil traders will monitor the developments surrounding the geopolitical tensions in the Middle East. The ongoing tensions could raise concerns about a tight market.