• WTI Oil prices dip to $57.60 after rejection at the $58.30 area on Tuesday.
• US Oil inventories rose, and the number of Oil rigs increased in the US last week.
• Rising geopolitical tensions are keeping Oil's downside attempts limited for now.

The recovery of the US benchmark West Texas Intermediate from $56.60 lows last week was capped on Tuesday at $58.30 before retreating to levels near $57.60 in Wednesday’s early European session. A somewhat stronger US Dollar and downbeat EIA Inventory figures have offset the positive impact of the geopolitical frictions in sensitive areas of the globe.

The US Dollar is drawing some support from the release of the minutes of the last Federal Reserve monetary policy meeting. The bank cut interest rates by 25 basis points, as widely expected, but the high number of dissenters and policymakers' concerns about inflation have cast doubts on the timing of the next interest rate cut.
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Furthermore, the US Energy Information Agency (EIA) reported that commercial crude Oil inventories increased by 400K barrels in the week of December 26, to 424.8 million barrels, despite the higher demand due to the Christmas holiday. These figures, coupled with a further increase in Oil drilling, reported by the Baker Hughes Oil Rig Count report, also released on Tuesday, increased negative pressure on prices.

Crude Oil, however, holds most of the ground taken over the last few days, as the waning hopes of an upcoming peace deal between Russia and Ukraine, and sabre-rattling between Israel and Iran keep prices supported.

Also on Tuesday, delegates from OPEC+, an organisation including most of the world's largest Oil producers, reaffirmed their plans to pause Oil output hikes over the coming months to support market stability amid growing concerns of an oversupply. The positive impact on prices, however, was minimal.

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