WTI edges higher above $60.00 on geopolitical risks

Texas Intermediate (WTI), the US crude oil benchmark, is trading around $59.55 during the early Asian trading hours on Tuesday. The WTI price gains traction over one-month highs amid rising tensions in Iran. Traders brace for the release of the American Petroleum Institute (API) crude oil stockpiles report on Tuesday. 

Reuters reported on Monday that US President Donald Trump said that any country that does business with Iran will face a tariff rate of 25% on any business conducted with the United States. This action came after Trump threatened repercussions if Iranian authorities target civilians, while Tehran warned the US and Israel against any intervention

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

Nonetheless, prospects for more supply from Venezuela might cap the upside for th

WTI price. 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 the highlight later in the day. 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, whic might drag the WTI price lower.