WTI declines to near $90.00 despite escalating Middle East conflict, supply risks

West Texas Intermediate (WTI) oil prices plummeted to near $90.00 per barrel, despite escalating Middle East tensions and supply risks. The decline occurred during Asian trading hours on Monday, when WTI traded at $90.00 per barrel. The situation worsened after Houthi militants attacked Riyadh's King Khalid International Airport twice, the second strike leaving 12 dead and over 300 injured.

Additionally, a drone strike hit an oil tanker near Sohar anchorage in Oman, near the Strait of Hormuz, further exacerbating supply concerns. While crude exports from the Persian Gulf seemed to rise, geopolitical uncertainties in Russia and Ukraine loomed. President Trump claimed an energy ceasefire between Russia and Ukraine, though details were unclear.

Ukrainian President Zelenskyy expressed uncertainty about the reported agreement. The US Department of Energy approved an emergency exchange involving up to 4 million barrels of crude oil from strategic reserves to address potential supply disruptions from Hurricane Isaias. Analysts noted that systematic players were struggling to find direction, with crude prices oscillating around the $90/bbl level, proven to be a critical reference point for trend-following strategies.

WTI oil is a high-quality, "light" and "sweet" crude sourced in the United States and traded on international markets. Supply and demand, global growth, political instability, wars, sanctions, OPEC decisions, and the US Dollar's value all influence WTI oil prices. Weekly API and EIA reports on oil inventories also impact WTI's price, with a drop indicating increased demand and higher prices, while higher inventories suggest increased supply and lower prices.