West Texas Intermediate (WTI) US Crude Oil briefly surged to a nine-week high, nearing $84.00 per barrel on Tuesday, before mid-US session market flows brought prices back down to $82.50.
Crude oil markets continue to be buoyed by ongoing tensions in the Middle East. The Israel-Palestinian Hamas conflict is causing turmoil in energy markets as investors fear that a cross-border spillover of the conflict could prompt direct action from Iran, which supports Hamas, potentially threatening crude oil supply and logistical stability in the region.
The American Petroleum Institute (API) reported its steepest weekly drop in US crude oil stocks in nearly two years. API data showed a decline of 9.163 million barrels, significantly exceeding the forecasted 150,000-barrel drawdown and adding to the previous week’s 3 million barrel decline.
Despite the sharp reduction in crude oil stocks, WTI bids remained constrained on the lower end of Tuesday’s range after the API also reported a 2.468 million barrel increase in gasoline inventories as refiners prepared for the summer travel peak. Distillate inventories declined by 740,000 barrels for the week ending June 28, while US crude oil stocks at the Cushing facility rose by 404,000 barrels.
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