West Texas Intermediate (WTI), the US crude oil benchmark, traded around $90.75 during early European hours on Wednesday, slipping below the $91.00 mark as optimism grew over peace negotiations between the US and Iran [1]. This renewed optimism raised expectations for improved energy supply, which weighed on WTI prices in previous sessions [1]. US President Donald Trump stated on Tuesday that negotiations with Iran to extend their ceasefire and reopen the crucial waterway are proceeding [1].
However, the outlook remains clouded by fresh US strikes on Iran, which dashed hopes for a Middle East breakthrough and kept security in the Strait of Hormuz uncertain [1]. The US Central Command denied reports that the military was helping escort vessels in the region, and the Iranian military asserted its right to retaliate against any ceasefire violations by the US [1]. Iranian Supreme Leader Mojtaba Khamenei emphasized that 'nations and lands of the region will no longer be a shield for American bases' [1].
Oil traders are awaiting the release of the American Petroleum Institute (API) report later on Wednesday. A larger-than-expected crude oil inventory draw could indicate stronger demand and potentially lift WTI prices, while a bigger build than estimated would signal weaker demand or excess supply, possibly weighing on prices further [1].
Overall, the interplay between diplomatic efforts and renewed military actions is creating volatility in the oil market, with traders closely monitoring both geopolitical developments and upcoming inventory data for further direction [1].
CONCLUSION
WTI crude oil prices have come under pressure due to progress in US-Iran peace negotiations, but renewed military strikes have added uncertainty to the outlook. Market participants are watching for further geopolitical developments and the upcoming API inventory report to gauge future price movements.