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- WTI slumps to near $80.50 in Friday’s early European session, down 2.60% on the day.
- Signs of increased oil tanker traffic through the Strait of Hormuz and profit-taking drag the WTI price lower.
- Iran’s Parliament Speaker said the US will ‘pay the price’ for killing Iranian civilians.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $80.50 during the early European trading hours on Friday. WTI tumbles as traders book some profits despite ongoing conflicts in the Middle East.
Profit-taking set in following the previous day’s sharp rally. Additionally, shipping through the Strait of Hormuz has picked up in recent days, with the US claiming its navy escorted some tankers across the waterway. Fourteen commodity vessels transited the critical waterway on Wednesday, up from single digits last week, according to Kpler.
However, ongoing hostilities in the Middle East might underpin the black gold. Iranian Parliament Speaker Mohammad Bagher Ghalibaf said on Thursday that the United States (US) will “pay the price” for killing Iranian civilians, per the Guardian.
The Islamic Revolutionary Guard Corps (IRGC) said on Thursday that it targeted US bases in Kuwait, Jordan and Bahrain after US forces bombed a building on Iran’s Qeshm Island. IRGC further stated that the Strait of Hormuz would remain closed and that the “aggressor will be punished.”
US crude oil inventories fell by more than expected last week. According to the US Energy Information Administration (EIA), crude oil stockpiles in the US for the week ending July 24 dropped by 7.167 million barrels, compared to a rise of 2.011 million barrels in the previous week. The market consensus was for a decline of 2.5 million barrels.
OPEC+ seen completing voluntary cut unwind before likely pause
Analysts at ING expect OPEC+ to confirm a further supply increase when the group meets on 2 August, projecting an additional “188k b/d for September.” They note that this move “would see the full unwinding of the 1.65m b/d of voluntary cuts announced back in 2023,” effectively restoring all of the extra curbs that had been in place. However, ING also points to reports suggesting the alliance “will likely pause any further supply increases following the September increase,” signaling a more cautious stance on adding barrels beyond that point.
