WTI climbs above $59.00 amid Middle East tensions

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $59.20 during the early Asian trading hours on Monday. The WTI price jumps as tensions in Iran are fueling concerns in the oil market. Traders brace for the release of the American Petroleum Institute (API) crude oil stockpiles report on Tuesday. 

US President Donald Trump is weighing a series of potential military options in Iran following deadly protests in the country, CNN reported on Sunday. Trump threatened repercussions if Iranian authorities target civilians, while Tehran warned the US and Israel against any intervention. The situation in Iran puts almost 2 million barrels per day of oil exports at risk of disruption, which could boost the WTI price in the near term. 

“Markets seem more focused on the intensifying unrest in Iran amid heated rhetoric and resilient fundamentals,” said Amarpreet Singh, Barclays’ analyst.  

Nonetheless, a US push to draw oil companies back into Venezuela might cap the upside for the black gold. Trump said last week that Venezuela’s interim government agreed to give as many as 50 million barrels of “high-quality, sanctioned oil” to the US. Trump added that the US wants full access to Venezuela’s oil following the arrest of former President Nicolas Maduro by US forces over the weekend.  

The API crude oil stockpiles report will be published on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could boost the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might drag the WTI price lower.