WTI trades around $71, recovers recent losses due to rising supply concerns
- WTI gains ground due to heightening fears of supply disruptions amid rising uncertainties in the Middle East.
- Israel launched strikes on southern Beirut while US Secretary of State Antony Blinken was touring the region, urging for a ceasefire.
- Oil prices faced challenges as EIA Crude Oil Stocks Change showed an increase of 5.474 million barrels
The West Texas Intermediate (WTI) Oil price has recovered its recent losses from the previous session and is currently trading at approximately $71 per barrel during Asian trading hours on Thursday. Investors continue to be concerned about the Middle East conflict, which is exacerbating their apprehensions regarding potential supply disruptions from the region. This is contributing to the support of crude oil prices.
While US Secretary of State Antony Blinken was touring the region on Wednesday, Israeli strikes struck southern Beirut, and he reiterated his call for a ceasefire in both Gaza and Lebanon. Hezbollah, which is sponsored by Iran, has escalated its attacks on Israel by deploying “precision missiles” for the first time and launching new types of drones that are designed to target Israeli sites. According to Reuters, Hezbollah also asserted that it had struck an Israeli military facility in the vicinity of Tel Aviv.
Oil prices were impacted by an unexpected increase in petrol inventories and a larger-than-anticipated increase in US stockpiles. Following seasonal maintenance, refineries increased production. The US Energy Information Administration (EIA) reported a 5.474 million barrel increase in petroleum oil stocks, bringing the total inventory to 426 million barrels for the week ending October 18. This figure is significantly higher than the anticipated increase of 0.7 million barrels.
On Wednesday, the US Dollar Index (DXY), which monitors the value of the US Dollar (USD) against six main currencies, reached its highest point since late July, reaching 104.57. This further diminished the demand for oil denominated in the dollar.
The likelihood of a substantial rate reduction by the Federal Reserve in November has been diminished by indicators of economic resilience and increasing inflation concerns. The US economy, the world’s largest oil consumer, could be strained by increased financing costs, which could potentially dampen economic activity and reduce oil consumption.
