WTI crude futures edged up around $67.70 as they consolidated their biggest daily decline in two weeks on Tuesday morning, recovering from their lowest levels since early May amid a sluggish market.

However, the weakness of the US dollar suggests that the market is betting on the Fed’s inaction during the FOMC meeting. According to the CME FedWatch Tool, the probability of the Fed’s inaction on Wednesday is over 70%, while the odds of a 0.25% rate hike in July are nearly 80%. However, concerns about the hawkish policy of the US Federal Reserve (Fed) and uncertainty ahead of the US Consumer Price Index (CPI) data for May have weighed on market sentiment and weighed on oil prices. Recently, former Dallas Federal Reserve Bank President Robert Kaplan stated in an interview that he supports a “hawkish policy delay” at this week’s meeting. Earlier, former Fed Vice Chairman Richard Clarida made comments that achieving 2% inflation could be more difficult than in the last 15 years. In addition, “More hawkish rate hikes are expected this week,” former Boston Federal Reserve Bank President Eric Rosengren tweeted on Monday morning. In addition, concerns over slowing economic momentum in China also weighed on WTI crude prices, given that China is one of the world's largest energy consumers. The People's Bank of China (PBOC) has lowered its repo rate to 1.9% from 2.0%, confirming earlier concerns about slowing economic growth in the world's largest industrial nation. Bloomberg reported, "China's central bank lowered its short-term policy rate and eased its monetary policy to support economic recovery." In addition, market concerns over escalating tensions between the US and China have grown as the US expanded its import ban on products originating from Xinjiang. China has vowed to protect Chinese companies from US sanctions, as reported by Reuters. Recently, Bloomberg reported the prepared remarks of US Treasury Secretary Janet Yellen's testimony before the House Financial Services Committee. In her testimony, Yellen stated that the IMF and World Bank act as important counterweights to opaque and unsustainable lending from other countries, such as China. Looking ahead, the US Consumer Price Index (CPI) data for May and private oil inventory data from the American Petroleum Institute (API) will be important factors for energy traders to watch. In our technical analysis obtained from the FxStreet site, the recovery of WTI crude oil prices is still difficult to predict unless the price manages to break through the previous support line that has been in place since early May, which is around $68.40 at the time of writing.

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