WTI crude oil prices are currently around $66.25, recovering due to a weaker US Dollar and increasing geopolitical tensions in the Middle East. A decline in the US Dollar Index has made oil cheaper for international buyers, while a Houthi spokesman warned of attacks on Israeli ships.
The American Petroleum Institute reported a rise in US crude oil inventories by 4.247 million barrels, contrasting with market expectations of a 2.1 million barrel increase. This follows a decrease of 1.455 million barrels from the previous week.
Impact Of Weaker Us Dollar
Concerns over tariff policies from the US government may also affect WTI prices. Despite recent tariff reversals on Canadian goods, new tariffs on imported steel and aluminium will still take effect, potentially impacting market stability.
A weaker US Dollar can make oil more affordable for international purchasers, increasing demand. With crude around $66.25, part of this recovery appears linked to recent depreciation in the dollar’s value. When the US currency loses strength, commodities priced in dollars often see renewed interest as they become more accessible to foreign buyers. This dynamic remains central to current price movements.
Meanwhile, geopolitical risks in the Middle East continue to add uncertainty. The statement from the Houthi official regarding potential attacks on Israeli ships introduces another layer of instability. Any disruption to maritime transport in key shipping routes could limit supply and push prices higher. Market participants will need to monitor this closely, particularly if tensions escalate and lead to logistical challenges.
Supply-side data provides another piece of the puzzle. According to the American Petroleum Institute, crude inventories in the US posted a sizable rise of 4.247 million barrels, a very different result from the anticipated increase of 2.1 million barrels. This follows a draw of 1.455 million barrels the week before. A stock build of this magnitude typically suggests weaker demand or stronger production levels, both of which could limit price recovery in the near term. The official government data from the Energy Information Administration will clarify the supply picture further. If a similar rise is reflected there, WTI may struggle to maintain upward momentum.
Effect Of Trade Policies
Beyond resource stockpiles, policy decisions add another consideration. Changes in tariffs, especially those related to industrial materials like steel and aluminium, bring potential implications for oil markets. The US administration’s decision to impose fresh tariffs on these raw materials could affect broader industrial activity, which in turn influences energy consumption. While some earlier trade restrictions on Canadian products were reversed, the planned steel and aluminium tariffs will remain. If these policies dampen economic growth or manufacturing output, energy demand could take a hit.
Each of these elements—currency valuations, geopolitical risks, inventory builds, and trade policies—factors into pricing over the next few weeks. Traders and analysts will need to assess how these forces interact, particularly as data updates continue to shape the broader market.
