- WTI stages a solid recovery from a one-week low, touched on Wednesday.
- Trump’s remarks temper de-escalation hope and boost the commodity.
- Reviving Fed rate hike bets underpin the USD, which might cap Oil prices.
West Texas Intermediate (WTI) Crude Oil prices catch aggressive bids during the Asian session on Thursday and surge past the $97.00 mark as US President Donald Trump’s prime-time address gets underway. The commodity now seems to have snapped a two-day losing streak to a one-week low, around mid-$92.00s, touched the previous day.
Trump reiterated the 2-3 week timeline and also threatened to hit Iran’s energy infrastructure if no deal is reached. This comes on top of the Wall Street Journal’s report on Tuesday that the United Arab Emirates (UAE) is pushing for military action to reopen the Strait of Hormuz and is lobbying for a UN Security Council resolution to authorize such an operation.
Moreover, the US is heavily reinforcing the Middle East with thousands of troops, marking the largest military buildup in two decades. This raises the risk of a further escalation of ongoing conflicts in the world’s premier oil-producing region and backs the case for a further appreciating move for the black liquid, back closer to a multi-week top set on Tuesday.
Meanwhile, the latest leg up in revives inflationary concerns, bolstering bets for an interest rate hike by the US Federal Reserve (Fed). Apart from this, a fresh wave of the global risk-aversion trade benefits the US Dollar’s (USD) status as the global reserve currency, which tends to undermine USD-denominated commodities, and might keep a lid on Crude Oil prices.
