WTI slips below $90.50 despite rising Middle East supply risks

West Texas Intermediate (WTI) oil price dipped below $90.50 per barrel despite mounting concerns over Middle East supply risks. This occurred during Asian trading hours on Tuesday, with crude oil prices showing signs of recovery as Iran threatened to attack energy infrastructure in the region following further US strikes on its assets.

The conflict had previously caused crude oil prices to surge almost 10% the previous week due to heightened fears of deeper energy disruptions. Saudi Aramco's facilities in Jazan near the Red Sea were once again targeted on Monday, though damage remained minimal. Iran also announced an agreement with Oman to manage shipping through the Strait of Hormuz, raising concerns about Tehran's growing influence over the vital waterway.

Meanwhile, the United States, as the world's largest oil producer and consumer, faces tight domestic inventory levels with gasoline and distillate fuel stocks significantly below year-ago and five-year seasonal averages. Despite these concerns, oil continues to flow through the Strait of Hormuz, with approximately 7 million barrels a day of crude and refined products passing through.

Analysts at Societe Generale maintain a positive outlook on the current upward trend in Brent, stating that recent lows near $89 could serve as short-term support, suggesting limited downside risks at present. WTI is a type of crude oil traded on international markets, known for its low gravity and sulfur content, making it a high-quality oil that is relatively easy to refine.

The price of WTI is influenced by supply and demand dynamics, global growth, political instability, wars, sanctions, OPEC decisions, and the value of the US Dollar, as oil is primarily traded in US Dollars.