Image Source: Pixabay

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $63.60 during the Asian trading hours on Thursday. The WTI price rises to its highest since late September as crude oil inventories drop and geopolitical tensions in Iran escalate. 

According to the US Energy Information Administration (EIA) weekly report, crude oil stockpiles in the US for the week ending January 24 fell by 2.296 million barrels, compared to a rise of 3.602 million barrels in the previous week. This unexpected decline in crude inventories implies a greater oil demand, supporting the WTI price. 

Reuters reported that a US aircraft carrier and supporting warships have arrived in the Middle East, adding to US President Donald Trump’s capabilities to defend US forces or potentially take military action against Iran. 

On Wednesday, Trump urged Tehran to “come to the table” and negotiate a “fair and equitable deal,” or the next US attack would be far worse. Iran responded with a threat to strike back against the US, Israel and those who support them. Heightened geopolitical risk in the Middle East and concerns over supply disruptions from OPEC’s fourth-biggest crude producer could boost the black gold in the near term. 

On the other hand, renewed US Dollar (USD) demand could weigh on the USD-denominated commodity price. US Treasury Secretary Scott Bessent said on Wednesday that the country has a strong dollar policy, adding that Washington's focus remains on establishing robust economic fundamentals. 

More By This Author: