Listen to the article here:
Oil prices inched up on Tuesday, with Brent crude up 44 cents to $71.86 a barrel and WTI crude climbing 45 cents to $67.83 a barrel after Monday’s steep 6% drop.
The slide had marked the lowest point since October 1, spurred by rising tensions in the Middle East, as Israeli air strikes on Iran avoided targeting Tehran’s oil infrastructure.
See: WTI Oil may be attempting a rebound near support levels around $65, though the bearish MACD suggests recovery could be limited unless momentum shifts. Download the VT Markets app now.
Investors found renewed support on Tuesday, however, with the U.S. announcing plans to add up to 3 million barrels to its Strategic Petroleum Reserve (SPR), adding demand stability while geopolitical risks continued to influence sentiment.
The U.S. commitment to purchase these barrels signals an effort to shore up strategic reserves, though funding constraints could limit further purchases until additional congressional approval.
This reserve strategy highlights a supportive stance toward oil markets amid broader demand challenges. The purchasing timeline extends through May next year, which may provide a longer-term cushion for oil prices and indicate cautious optimism from the U.S. about reducing volatility in energy supply.
The latest developments in Israel-Iran relations have kept the oil market on edge. On Saturday, Israeli jets conducted three waves of air strikes on sites near Tehran and western Iran, targeting missile facilities while leaving oil infrastructure intact.
This shift towards strategic military targets has temporarily reduced the risk of disruptions in oil flows.
Still, tensions remain high, especially after Iranian officials signalled on Monday that they could take further action in response to the strikes, adding potential pressure on oil supply in the future.
The U.S. has warned Iran of serious consequences if aggression continues, bringing uncertainty to the market outlook.
On the demand side, winter kerosene usage across the Northern Hemisphere remains limited as temperatures haven’t yet spiked, while China’s economic recovery continues to face challenges, resulting in subdued demand from the world’s largest oil importer.
Market participants are keeping a close watch on upcoming inventory data releases by the American Petroleum Institute and the Energy Information Administration.
Early reports suggest a potential increase in crude and gasoline stocks but a decrease in distillate inventories, potentially reflecting slight adjustments in fuel demand.
See also: Oil Dips as U.S. Crude Stocks Rise
With winter months still ahead and China’s recovery pace uncertain, any renewed geopolitical disruptions could reintroduce volatility.
Start trading now — click here to create your live VT Markets account.
Education
Company
FAQ
Promotion
Risk Warning: Trading CFDs carries a high level of risk and may not be suitable for all investors. Leverage in CFD trading can magnify gains and losses, potentially exceeding your original capital. It’s crucial to fully understand and acknowledge the associated risks before trading CFDs. Consider your financial situation, investment goals, and risk tolerance before making trading decisions. Past performance is not indicative of future results. Refer to our legal documents for a comprehensive understanding of CFD trading risks.
The information on this website is general and doesn’t account for your individual goals, financial situation, or needs. VT Markets cannot be held liable for the relevance, accuracy, timeliness, or completeness of any website information.
Our services and information on this website are not provided to residents of certain countries, including the United States, Singapore, Russia, and jurisdictions listed on the FATF and global sanctions lists. They are not intended for distribution or use in any location where such distribution or use would contravene local law or regulation.
VT Markets is a brand name with multiple entities authorised and registered in various jurisdictions.
· VT Global Pty Ltd is authorised and regulated by the Australian Securities & Investments Commission (ASIC) under licence number 516246.
· VT Global is not an issuer or market maker of derivatives and is only allowed to provide services to wholesale clients.
· VT Markets (Pty) Ltd is an authorised Financial Service Provider (FSP) registered and regulated by the Financial Sector Conduct Authority (FSCA) of South Africa under license number 50865.
· VT Markets Limited is an investment dealer authorised and regulated by the Mauritius Financial Services Commission (FSC) under license number GB23202269.
· VTMarkets Ltd, registered in the Republic of Cyprus with registration number HE436466 and registered address at Archbishop Makarios III, 160, Floor 1, 3026, Limassol, Cyprus.
Copyright © 2024 VT Markets.