WTI price may regain its ground amid rising Oil supply concerns.
API Weekly Crude Oil Stock decreased by 3.8 million barrels last week, the largest draw in seven weeks.
Oil prices were bolstered as NATO pledged a “robust” response to Russian airspace breaches.
West Texas Intermediate (WTI) Oil price edges lower after registering more than 2% in the previous session, trading around $63.50 per barrel during the Asian hours on Wednesday. Crude Oil prices gained ground after the American Petroleum Institute’s (API) Weekly Statistical Bulletin (WSB) reported a drop in United States (US) crude inventories, heightening supply concerns. API data showed US Weekly Crude Oil Stock fell by 3.8 million barrels last week, the largest draw in seven weeks, following the previous decline of 3.4 million barrels.
The Oil prices appreciated as Iraq's Kurdistan did not resume pipeline shipments of Oil from the region to Turkey despite hopes of a deal to end the deadlock, as two key producers asked for debt repayment guarantees. Pipeline flows have been stopped since March 2023, per Reuters.
Geopolitical tensions continued to support Oil prices, as NATO vowed a “robust” response to Russian airspace violations and Ukrainian drone attacks on Russian refineries and pipelines. Moreover, President Trump warned at the United Nations (UN) General Assembly on Tuesday that the United States (US) is ready to impose a “very strong round of powerful tariffs” if Russia refuses to end the war in Ukraine. Trump also criticized European countries for buying Russian energy, arguing that “they are funding the war against themselves,” and urged the EU to join Washington in implementing tariffs to ensure their effectiveness.
The price of the black gold may struggle as the Fed Chair Jerome Powell struck a cautious note, stressing that the US central bank must weigh stubborn inflation against a softening job market, calling it “a challenging situation” and reiterating comments from last week. It is worth noting that higher borrowing costs for longer would negatively impact the economic activities in the United States, the world’s largest Oil consumer, and dampen Oil demand.
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