WTI slumps below $91.00 on US–Iran peace progress while fresh strikes cloud outlook
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $90.75 during the early European trading hours on Wednesday. The potential downside for crude oil prices might be limited as fresh US strikes on Iran dashed hopes of a Middle East breakthrough.
Renewed optimism surrounding peace negotiations between the US and Iran raised expectations of improved energy supply, which weighed on the WTI price in the previous sessions. US President Donald Trump said early Tuesday that negotiations with Iran to extend their ceasefire and reopen the crucial waterway are proceeding.
However, security in the Strait of Hormuz remained unclear after the US and Iran exchanged strikes on Tuesday, and US Central Command pushed back on reports that suggested the military was helping escort vessels. Any signs of rising tensions in the Middle East could boost the WTI price in the near term.
The Iranian military stated that it reserved the “legitimate and definite” right to retaliate against any ceasefire violations by the US. Meanwhile, Iranian Supreme Leader Mojtaba Khamenei said that “nations and lands of the region will no longer be a shield for American bases.
Oil traders brace for the release of the American Petroleum Institute (API) report, which will be published later on Wednesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might weigh on the WTI price.
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