WTI recovers to near $86.50 as Strait of Hormuz remains closed
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WTI price recovers some lost ground to near $86.40 in Tuesday’s early Asian session.
The IEA is reportedly considering a joint release of emergency Oil reserves.
Trump predicted the war with Iran would be resolved very soon.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $86.40 during the early Asian trading hours on Tuesday. The WTI price faces extreme volatility following a massive spike to nearly $120 per barrel in the previous session.
The International Energy Agency (IEA) on Monday was reportedly discussing a coordinated release of emergency oil reserves among member countries to stabilize markets. Such actions are typically deployed when major supply disruptions threaten global energy security. The release of emergency oil reserves by countries coordinated through the IEA can add temporary supply to the market and prevent a sharp spike in oil prices.
Additionally, US President Donald Trump said that he plans to waive oil-related sanctions and predicted the war with Iran would resolve “very soon” as he confronted mounting economic and political pressures after days of dramatic fluctuations in oil markets. His remarks ease concerns about a prolonged conflict in the Middle East, which drags the WTI price lower.
Nonetheless, the Strait of Hormuz remained all but closed, with no finalized plans on how nations will safeguard ships passing through the key waterway. The ongoing war in the Middle East and shutdown of the Strait of Hormuz, where about one-fifth of global oil shipments pass, have triggered a major disruption to global fuel supplies. This, in turn, might boost the WTI price in the near term.
Traders brace for the release of the American Petroleum Institute (API) report, which will be released later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might weigh on the WTI price.
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