WTI rises above $67.00 on geopolitical risks, Fed rate decision might cap gains

WTI price drifts higher to $67.20 in Thursday’s early Asian session. 

The Israeli military resumed ground operations in central and southern Gaza, underpinning the WTI price. 

Crude oil stockpiles in the US rose by 1.745 million barrels last week, according to the EIA. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $67.20 during the early Asian session on Thursday. The WTI price edges higher amid the ongoing geopolitical tensions in the Middle East. However, the Federal Reserve's (Fed) decision to hold interest rates steady might cap the upside for WTI price. 

The Israeli military resumed ground operations in the central and southern Gaza Strip. US President Donald Trump threatened to continue his country’s attack on Yemen's Houthis and said he would hold Iran responsible for any attacks carried out by the group that has disrupted shipping in the Red Sea. The Red Sea disruption has caused an increase in energy transportation prices and the WTI price since oil and gas cargo shipments have been forced to take longer routes.

"Traders are being forced to refocus on Mideast geopolitical risks as Israel and the United States launch attacks on Gaza and Yemen, respectively," said Clay Seigle, senior fellow for energy security at the Center for Strategic and International Studies.

Crude Oil inventories climbed last week. The US Energy Information Administration (EIA) weekly report showed crude oil stockpiles in the United States for the week ending March 14 rose by 1.745 million barrels, compared to an increase of 1.448 million barrels in the previous week. The market consensus estimated that stocks would increase by 1.17 million barrels. 

The US Federal Reserve (Fed) held rates steady at the 4.25%-4.50% range at the March meeting on Wednesday, as widely anticipated. Nonetheless, Fed officials still see reducing borrowing costs by half a percentage point by the end of this year due to slowing economic growth and a downturn in inflation. This, in turn, raises concerns about slower energy demand and weighs on WTI price.