WTI trades around $70.50, possible seem limited due to rising supply threats

• WTI may appreciate further due to rising expectations of supply threats amid US sanctions on major producers Russia and Iran
• The US is considering further sanctions on “dark fleet” tankers and Chinese banks to curb Russia’s Oil revenue
• Crude Oil prices gained ground as the Fed is widely expected to deliver a 25-basis-point rate cut on Wednesday

During the Asian session on Monday, the West Texas Intermediate (WTI) Oil price corrected downward after registering gains in the previous session, trading at approximately $70.50 per barrel. As a result of the implementation of additional US sanctions on major producers Russia and Iran, crude oil prices have increased in anticipation of a reduction in supply.

On Friday, US Treasury Secretary Janet Yellen disclosed to Reuters that the United States is contemplating the imposition of additional sanctions on “dark fleet” tankers and the potential imposition of sanctions on Chinese banks in order to restrict Russia’s access to foreign supplies and oil revenue, which are contributing to its conflict in Ukraine.

Furthermore, the demand for oil may be stimulated by the optimism regarding China’s intentions to increase economic stimulus. In response to the imminent 10% US tariffs that threaten exports, Chinese authorities, under the leadership of President Xi Jinping, have committed to increasing the fiscal deficit objective next year. This shift in policy focus is intended to stimulate the economy by increasing consumption.

The price of petroleum oil In addition to the recent interest rate reductions implemented by central banks in Canada, Europe, and Switzerland, oil, which is frequently referred to as “liquid gold,” also experienced an increase in value subsequent to the improved market sentiment. The Federal Reserve’s (Fed) forthcoming policy decision on

Wednesday is the primary focus of traders, who anticipate a 25-basis-point rate reduction. This action has the potential to increase oil demand and stimulate economic development, as the reduction of borrowing costs is expected to have a positive effect on economic activity.