WTI Holds Near $92 as Geopolitical Tensions and Supply Risks Escalate
WTI crude oil is trading around $91.75, struggling to recover above $94-95. The technical outlook remains weak, with prices below key moving averages and strong resistance near $97-98.
The latest EIA report showed U.S. crude inventories rising by 0.9 million barrels, reaching 427.3 million. However, refined product inventories remain tight, with gasoline stocks falling by 1.7 million barrels and distillate stocks declining by 2.3 million. U.S. oil production is steady at 14 million barrels per day, with forecasts suggesting Brent could average $74 in 2027 as Middle East supply recovers.
Geopolitical risks are resurfacing, particularly in the Middle East. Aramco CEO Amin Nasser warned of severe supply shocks, noting that global oil inventories have dropped significantly. Recent attacks on Saudi infrastructure, including the East-West pipeline, have added to market uncertainty. The Strait of Hormuz remains a critical vulnerability, with potential disruptions threatening to push WTI prices back above $95.
The near-term support level for WTI is $91.20-91.00, with a potential fall to $90.00 if this level breaks. However, selling oil at current levels is risky due to geopolitical tensions. Any new disruptions could quickly reverse the downward trend, despite fundamental pressure from high U.S. production.