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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $69.30 on Wednesday. The WTI price trades flat after Ukraine used US ATACMS missiles to strike Russian territory for the first time.
On Tuesday, Russia’s defense ministry said that Ukraine hit a facility in the Bryansk region with six ATACAMS missiles. In response, Russian President Vladimir Putin lowered the threshold for a possible nuclear strike. The rising geopolitical tensions could boost the WTI price for the time being. “This marks a renewed build up in tensions in the Russia-Ukraine war and brings back into focus the risk of supply disruptions in the oil market,” ANZ Bank analyst Daniel Hynes said.
Additionally, Iranian supreme leader Ayatollah Ali Khamenei warned of a “crushing response” to Israel’s recent air strikes on Iran, which raise concerns about the region’s crude supply disruption. This, in turn, might contribute to the WTI’s upside.
On the other hand, China’s demand for oil slowed dramatically this year. China’s crude oil demand fell -5.4% YoY in October, which might exert some selling pressure on the black gold as China is the world’s second-largest crude consumer. Chinese demand growth is set to reach just 140,000 bpd this year, a tenth of the 1.4 million bpd demand growth of 2023, according to the IEA. More By This Author:USD/CAD Softens To Near 1.3950 On Hotter Canadian CPI Data, Eyes On Geopolitical Risks USD/CAD Posts Modest Gains Above 1.4000, Canadian CPI Data In Focus EUR/JPY Attracts Some Buyers To Near 163.00 Amid BoJ Rate Hike Uncertainty
