WTI consolidates below $72.00 as traders monitor geopolitical developments
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – steadies during the Asian session on Friday, stalling the previous day's downfall amid mixed messaging from the US and Iran. The commodity currently trades around the $71.75 area, nearly unchanged for the day, as traders await further developments surrounding the Middle East crisis.
The geopolitical risk premium resurfaced this week after the US military unleashed a new wave of strikes against Iran earlier this week in retaliation for Tehran’s attacks on commercial ships in the Strait of Hormuz. Iran responded by targeting American allies and bombing US military installations across Bahrain and Kuwait. Moreover, US President Donald Trump signaled the end of the ceasefire on Wednesday, which, in turn, led to a rally in Crude Oil prices during the first half of the current week.
The market anxiety, however, subsided after Trump on Thursday claimed that Iran had called to make a deal with the US to cease escalating hostilities in the Middle East. Adding to this, a White House official said that the US is still committed to the memorandum of understanding with Iran. This, along with the OPEC+ decision of another production target increase, could act as a headwind for Crude Oil prices, warranting some caution before placing fresh bullish bets or positioning for any upside.
Earlier this week, the US Energy Information Administration (EIA) reported a larger-than-expected build in inventories for the week ending July 3, marking the first rise in 11 weeks. According to the latest data, commercial Crude Oil stocks rose by 2.998 million barrels, significantly overshooting analyst forecasts. This might further contribute to keeping a lid on Crude Oil prices. Nevertheless, the commodity seems poised to register modest weekly gains and snap a four-week losing streak.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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