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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $59.10 during the Asian trading hours on Friday. The WTI price recovers some lost ground, snapping the two-day losing streak, as traders assess the geopolitical situation in the Middle East. 

US President Donald Trump said early Thursday that Iran has “no plan for executions,” amid fears for the fate of a detained anti-government protester. Nonetheless, Trump hasn’t taken any options off the table, saying that there will be “grave consequences” if killings continue. 

Reuters reported late Thursday that the US military is moving a carrier strike group to the Middle East region amid the ongoing tension. Traders will closely monitor the latest geopolitical developments surrounding the Iranian civil unrest. Any signs of rising tensions in Iran could boost the WTI price, as Iran is the third-largest crude oil producer within OPEC. 

Daniel Takieddine, co-founder and CEO of Sky Links Capital Group, said that geopolitical risk has not disappeared despite a softer tone from Trump. “Tensions across major producing regions remain elevated, and developments in Eastern Europe and Latin America continue to inject uncertainty into energy supply chains,” said Takieddine. 

The potential upside for the WTI price might be limited amid supply glut concerns. On Wednesday, the US Energy Information Administration (EIA) reported larger-than-expected builds in crude oil, raising worries about weak demand and oversupply.

According to the EIA weekly report, crude oil stockpiles in the US for the week ending January 14 rose by 3.391 million barrels, compared to a fall of 3.831 million barrels in the previous week. The market consensus estimated that stocks would decline by 2.2 million barrels.

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