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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $62.50 during the early European trading hours on Friday. The WTI price attracts some sellers amid persistent oversupply concerns.
The International Energy Agency (IEA) on Thursday projected in its monthly report that this year global oil demand growth will be weaker than previously expected, with overall supply set to exceed demand.
Furthermore, a significant build in US crude stockpiles might contribute to the WTI’s downside. According to the US Energy Information Administration (EIA) weekly report, crude oil stockpiles in the US for the week ending February 6 climbed by 8.53 million barrels, compared to a fall of 3.455 million barrels in the previous week.
On the other hand, rising tensions between the United States and Iran could underpin the WTI price. The Wall Street Journal reported on Wednesday that the US is considering seizing tankers with Iranian crude, and the US could send a second aircraft carrier strike group to the Middle East should nuclear talks with Iran fail.
Traders will closely monitor the developments surrounding diplomatic relations between the US and Iran. “The main driving force in the oil markets currently is still US-Iran tensions,” said Zhou Mi, an analyst at a research institute affiliated with Chaos Ternary Futures Co. “Prices are likely to remain volatile.”
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