WTI drifts higher to near $64.00 on Russia-Ukraine supply concerns

• WTI price attracts some buyers near $63.95 in Monday's early European session, adding 0.30% on the day. 
• Rising Fed rate cut bets and persistent Russia-Ukraine tensions support the WTI price.
• Investors assess the impact of the heightened US tariffs on Indian goods. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $63.95 during the early European trading hours on Monday. The WTI recovers some lost ground as rising bets of a Federal Reserve (Fed) rate cut offset pressure from new US tariffs on Indian imports. Traders await the release of the American Petroleum Institute (API) weekly crude oil stock, which is due later on Tuesday. 

Traders still ramp up their bets of a Fed rate reduction this month despite the hot US Personal Consumption Expenditures (PCE) Price Index report for July. Markets are now pricing in nearly an 89% possibility of a 25 basis points (bps) rate cut by the Fed at the September policy meeting, up from an 85% chance before the US PCE data, according to the CME FedWatch tool. Fed rate cut expectations might weigh on the US Dollar (USD) and underpin the USD-denominated commodity price. 

Additionally, escalating tensions between Russia and Ukraine contribute to the WTI's upside as the attacks reignited supply security concerns. Ukrainian drone strikes hit Russian energy sites, sparking a fire at the Kursk Nuclear Power Plant and damaging the Ust-Luga export terminal in the Baltic Sea. US President Donald Trump threatened to impose additional sanctions on Russia if no progress is made in peace talks with Ukraine.  

On the other hand, Trump's decision to impose steep tariffs on Indian imports took effect, raising fears of slowing trade and weaker global demand. This, in turn, might undermine the black gold in the near term. The Trump administration doubled tariffs on Indian imports to 50%, citing India's refusal to stop buying Russian crude and defence hardware.