West Texas Intermediate (WTI) US Oil trades around $58.20 on Tuesday, up 0.9% on the day, extending its recent gains amid ongoing geopolitical concerns. Crude prices are buoyed by renewed risk aversion as hopes for a swift resolution to the war in Ukraine remain limited.
Geopolitical developments support oil prices
US-led talks have so far failed to achieve a breakthrough, particularly on sensitive territorial issues. Reuters reports that Moscow accused Kyiv of carrying out a drone attack targeting a presidential residence, an allegation denied by Ukraine. Rising geopolitical tensions in Eastern Europe are reinforcing supply disruption fears, providing near-term support for WTI.
Tensions in the Middle East also add to the market’s risk premium. US President Donald Trump has indicated potential military action against Iran if certain strategic programs are revived, raising concerns about stability in a region critical to global energy supply.
Supply-side factors temper further gains
While geopolitical risk underpins prices, upside is limited by concerns over global crude supply. The Organization of the Petroleum Exporting Countries and its allies (OPEC+) confirmed a modest production increase of 137,000 barrels per day starting in December, raising fears of oversupply if global demand softens.
Market eyes API inventory data
Traders are now focused on the weekly Crude Oil inventory report from the American Petroleum Institute (API), due later in the session. The report is expected to provide fresh direction for WTI prices amid the current mix of geopolitical support and supply concerns.
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