US-Iran Tensions Boost WTI Despite Retreat from Three-Month High
West Texas Intermediate (WTI) crude oil prices have retreated from their three-month high of $92.50, but experts believe supply concerns will limit any significant downward movement. The escalating US-Iran tensions are keeping a geopolitical risk premium in place, supporting oil prices.
The latest developments in the Middle East crisis include the US attacking Iranian oil tankers and Iran firing over 30 missiles at US forces stationed in Jordan. This has weighed on shipping traffic through the Strait of Hormuz, with Iran's security chief warning that Tehran is preparing to enforce a full blockade around the strategic waterway.
The continued military confrontations have also raised fears of a prolonged disruption to oil supplies, validating the near-term positive outlook for WTI prices. However, bulls seem hesitant to place fresh bets and are waiting for the release of US inflation figures for cues about the Federal Reserve's policy path.