West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $73.35 on Wednesday. The WTI price edges lower on the report of a possible ceasefire between Hezbollah and Israel. However, the fears of a potential attack on Iranian oil infrastructure might cap its downside.
Investors have reduced their war-risk bets as the lack of further escalation alleviated fears of oil supply disruption in the Middle East. This, in turn, weighs on the WTI price on the day. Israel Defence Minister Yoav Gallant will meet with US Secretary of Defence Lloyd Austin at the Pentagon on Wednesday to discuss security developments in the Middle East.
Meanwhile, the development surrounding geopolitical tension in the region will be closely watched. The fears that Israel might be targeting Iran’s oil industry in retaliation for Tehran’s ballistic missile attack could lift the black gold price.
US crude oil inventories rose more than expected last week. According to the American Petroleum Institute (API), crude oil stockpiles in the United States for the week ending October 4 rose by 10.9 million barrels, compared to a fall of 1.5 million barrels in the previous week. The market consensus estimated that stocks would increase by only 1.95 million barrels.
The disappointment that Chinese officials did not announce any new stimulus measures at a press briefing Tuesday contributes to the WTI’s downside as China is the world’s largest crude importer. “Ongoing concerns about China’s demand persist due to the lack of stimulus, while the Middle East conflict has not led to any supply disruptions,” said Svetlana Tretyakova, senior oil market analyst at Rystad Energy. More By This Author:Australian Dollar Gathers Strength After RBA Minutes AUD/JPY Price Forecast: Attracts Some Sellers Near 100.00, Further Consolidation Cannot Be Ruled Out GBP/USD Trades With Mild Gains Above 1.3100, Focus On US NFP Data
