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28/05/26
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WTI Rebounds as Middle East Tensions and Tight U.S. Inventories Support Prices
West Texas Intermediate advanced during the Asian session on Thursday, recovering much of the previous day’s decline and rebounding from its lowest level since April 21. The benchmark U.S. crude price briefly reached a new intraday high and was trying to move back above $91 as traders assessed the risk of a wider escalation in the Middle East.
The move was supported by reports of fresh U.S. strikes on an Iranian military site overnight. U.S. officials viewed the target as a potential threat to American forces and commercial shipping in the Strait of Hormuz. In response, Iran’s Islamic Revolutionary Guard Corps said it had targeted a U.S. airbase and warned that additional American attacks would be met with a stronger response. That exchange helped keep a geopolitical risk premium embedded in oil prices.
Sentiment was also pressured by remarks from President Donald Trump, who indicated that he was not satisfied with the terms of the proposed deal with Iran and did not want to be rushed into an agreement. Those comments weakened expectations for a near-term diplomatic breakthrough in a conflict that has already lasted several months. At the same time, shipping activity through the Strait of Hormuz remained constrained by Iranian restrictions and the U.S. naval blockade of Iranian ports.
Fundamentals in the physical market added further support. Data from the American Petroleum Institute showed that U.S. crude inventories declined for a sixth consecutive week, reinforcing the view that supplies remain tight. That combination of lower stocks and elevated regional tensions has helped keep the short-term outlook for oil constructive.
Even so, further gains may be limited if demand for the U.S. dollar continues to firm, since a stronger currency typically weighs on dollar-priced commodities. Market participants are now looking to the U.S. Personal Consumption Expenditures price index and the preliminary estimate of first-quarter GDP for clues on inflation and growth later in the North American session.
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