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• West Texas Intermediary (WTI) losses near 1.20% after failing to test $68.00.
• Monthly gains for WTI are close to 10% as tensions in the Middle East emerge on Thursday.
• The US and Iran prepare for another round of nuclear talks, which could provide an additional catalyst for WTI.

West Texas Intermediary (WTI) is trading lower in the American session on Thursday, erasing a portion of gains from the prior session. 

After surging 5.22% on Wednesday, prices broke above the 100-day Simple Moving Average (SMA), reaching a high of $67.82.

However, despite the optimistic boost received from the de-escalation in US-China trade tensions and declining stockpiles, risk sentiment remains fragile. US President Donald Trump’s tariff threats have resurfaced, tensions in the Middle East are escalating, and trade tensions persist.

Additionally, the recent recovery in oil prices has resulted in an approximate 10% price gain this month. This may warrant a correction in prices, at least in the near term.

From a fundamental standpoint, tariffs and trade tensions often result in diminishing economic growth prospects, dampening demand for Oil. However, tensions in the Middle East, particularly in Iran, could lead to higher prices in the event of supply disruptions. 

NBC news reported, citing five people familiar with the matter, that Israel is considering taking military action against Iran in the coming days. At the same time, Trump confirmed on Wednesday that US personnel are being moved out of parts of the Middle East due to the escalating tensions between Israel and Iran. This occurs ahead of the sixth round of nuclear talks between the US and Iran, scheduled for this weekend in Oman. 

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