The benchmark crude WTI (CM:CL) remains relatively unchanged today as traders assess the implications of escalating tensions in the Middle East.
New Woes in the Middle East
At present, Israel is weighing a potential response to an earlier missile and drone strike from Iran. Today, Iran has warned that it could hit nuclear sites in Israel if it is attacked.
This week, oil has largely trended lower and is still down by nearly 3% over the past five sessions as traders gradually scale back the geopolitical risk premium from oil prices. However, the latest development in the Middle East could add new strength to oil prices today.
U.S. Oil Buildup Continues
On the other hand, the recent increase in U.S. oil stockpiles could continue to weigh on oil prices. Data from the Energy Information Administration indicated an increase of 2.7 million barrels in crude inventory for the week ended April 12. This was the fourth consecutive weekly buildup in U.S. crude inventories. In tandem, numbers from the American Petroleum Institute (API) pointed to an increase of 4.09 million barrels in U.S. commercial stockpiles for the week ended April 12.
Will Crude Oil Price Go Up?
Oil has now soared by nearly 16.4% so far this year. A wider conflict in the Middle East could potentially further boost these gains. Meanwhile, the TipRanks Technical Analysis tool continues to flash Strong Buy signals for oil.
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