U.S. West Texas Intermediate and international-benchmark Brent crude oil futures finished marginally higher last week after being pressured most of the week. The markets were essentially supported by expectations of higher demand and the OPEC+ production cuts.

Prices retreated from a nearly 2-year high after the Federal Reserve moved up the timing of its first rate hikes on Wednesday. This raised fears that the move would slow down the economy and thus, demand for crude oil and gasoline. Traders were also becoming concerned that a U.S.-Iran nuclear deal would lead to increased supply from the rogue nation.

Last week, September WTI crude oil settled at $70.45, up $0.53 or +0.76% and September Brent crude oil closed at $72.73, up $0.62 or +0.85%.

Crude oil prices were also pressured as the dollar strengthened after the U.S. Federal Reserve signaled it might raise interest rates as soon as 2023.

At the end of the week, traders were eyeing fresh coronavirus cases from the U.K. Britain reported its biggest daily rise in new cases of COVID-19 since February 19 on Thursday, according to government figures which showed 11,007 new infections, up from 9,055 the day before.

Crude Inventories Drop, Gasoline Stocks Rise

Last week, both the American Petroleum Institute (API) and the Energy Information Administration (EIA) reported lower crude oil inventories and a rise in U.S. gasoline stocks. According to the EIA, U.S. gasoline supply increased by an unexpected 2 million barrels the week-ending June 11. Analysts forecast gasoline stocks would decline 600,000 barrels.

Weekly Forecast

The surprise last week was the jump in the U.S. Dollar With the Fed announcing a major shift in policy, crude oil traders were caught off-guard since central bank policymakers had been reiterating that rates wouldn’t move up until at least 2024, the rise in consumer inflation was transitory and the pace of the labor market recovery is still too slow.

A strong dollar won’t change the trend to down, but it could cap gains over the short-run while traders adjust their bullish positions.

This week, traders could be surprise by the announcement of a nuclear deal between the US and Iran. Prices could fall sharply if the deal allows Iran to bring its oil to the market. Analysts have said Iran could boost oil supplies by 1 million to 2 million barrels per day (bpd) if sanctions are lifted.

An acceleration in the number of COVID-19 cases in the U.K. could also weigh on prices. However, losses could be offset by a drop in U.S. gasoline stocks due to increased summer driving.