WTI Retreats as Geopolitical Premium Weighs on Crude Prices
WTI crude prices have retreated from their recent high after a strong rally, but remain elevated due to ongoing geopolitical tensions. Fresh attacks on Saudi oil tankers in the Red Sea and concerns over shipping through strategic waterways have reinforced fears of supply disruptions.
The market continues to price in a significant premium for geopolitical risks as investors monitor the possibility of further escalation between Iran and the US. OPEC+ has reaffirmed its production normalization strategy, but stressed that future output adjustments can be reversed if market conditions deteriorate.
US Energy Information Administration data showed commercial crude oil inventories increased by 2 million barrels to 411.7 million barrels, still around 6% below the five-year seasonal average. Investors are also assessing the outlook for US monetary policy, with expectations of a less restrictive stance later this year supporting fuel demand.
The technical picture suggests WTI has entered a corrective phase after failing to extend its rally above $93-94. Initial support is located around $90.00, followed by $88.00-$87.50, where buyers could become more active. A break below these levels would expose $85.00 and potentially trigger a deeper correction.