WTI Oil Breaks Above $65.00 as US Crude Inventories Drop Sharply

WTI Crude Oil Rises Above $65.00 on Strong US Demand Signals

West Texas Intermediate (WTI) crude oil climbed back above $65.00 per barrel during Thursday’s Asian session, ending a three-day losing streak. The rally was supported by a larger-than-expected drawdown in US crude inventories, suggesting resilient demand in the world's largest oil consumer.

US Crude Inventories Post Biggest Weekly Drop in Months

According to the US Energy Information Administration (EIA), crude oil inventories declined by 5.8 million barrels for the week ending June 20. This drop brought inventories to an 11-year seasonal low, signaling robust refining activity and strong demand for fuel products.

The report also highlighted an unexpected 2.1 million barrel drop in gasoline inventories, compared to expectations for a 381,000-barrel build. This marks the highest gasoline consumption level since December 2021, further emphasizing increased energy demand during the summer travel season.

Ceasefire Between Israel and Iran May Cap Upside

Despite the bullish inventory data, geopolitical developments in the Middle East may ease supply concerns. A recently brokered ceasefire between Israel and Iran has lessened fears of potential supply disruptions from the region, traditionally a critical risk factor for oil markets.

Traders are closely monitoring ongoing negotiations between the US and Iran, as any progress could influence the outlook for Iranian oil supply returning to the global market.

Outlook

With fundamental support from tighter inventories and seasonal demand, WTI crude may see further upside. However, geopolitical stability and developments in US-Iran talks could temper gains. Traders should also stay tuned to updates on OPEC+ production strategies and global economic indicators that may influence demand forecasts.

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