WTI price trades in negative territory in Wednesday’s early Asian session.
Traders will closely watch Iran's nuclear program and the potential supply interruptions.
Surprise crude oil inventory build ended five-week draw streak.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.85 during the early Asian trading hours on Wednesday. The WTI price drifts lower as investors assess the developments surrounding geopolitical risks in the Middle East. Meanwhile, traders await cautiously ahead of an OPEC+ meeting to decide the group's August output policy.
US officials said that Iran was prepped to mine the Strait of Hormuz last month after Israeli strikes, but the mines were never deployed, per Reuters. Oil traders will closely monitor whether Iran’s inventories of near-bomb-grade uranium have been depleted and whether its moves to cut off communication with key United Nations (UN) watchdog officials would spark another round of US attacks.
US President Donald Trump stated that the US will “be there” unless Iran gives up its nuclear program. Any signs of escalation could prompt fears of oil supply disruption and might underpin the WTI price.
On the other hand, a surprise crude oil inventory build last week weighs on the WTI price. The American Petroleum Institute (API) weekly report showed crude oil stockpiles in the US for the week ending June 27 unexpectedly increased by 680,000 barrels, compared to a fall of 4.277 million barrels in the previous week. The market consensus estimated that stocks would decline by 2.26 million barrels. So far this year, crude oil inventories are up 4.0 million barrels, according to Oilprice calculations of API data.
Oil traders will keep an eye on the US ADP Employment Change report for June, along with the US Energy Information Administration (EIA) Crude Oil Stockpiles report, which are due later on Wednesday.
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