WTI Stages Sharp Comeback as Middle East Supply Risks Intensify

Detailed summary

December WTI crude oil futures are lower for the week, but the market has recovered a good portion of its early loss. The contract opened at $90.83, broke to $83.88, then rallied…

December WTI crude oil futures are lower for the week, but the market has recovered a good portion of its early loss. The contract opened at $90.83, broke to $83.88, then rallied back to $88.20. At that price, WTI is down $2.63 for the week, or 2.90%.

Traders took war premium out of crude after President Trump played down the possibility of new U.S. strikes on Iran. Higher Saudi production and a large build in U.S. inventories gave sellers more to work with. But attacks on Saudi energy infrastructure and continued threats to shipping brought buyers back.

The week opened with traders focused on the possibility of a less aggressive U.S. approach toward Iran. Trump said he was unlikely to order fresh attacks while efforts to end the conflict were making progress. He later said he planned to hold off on new strikes for the time being after appeals from countries in the region, including Qatar.

WTI had already been under pressure as traders reduced the premium built into prices over months of war and shipping disruptions. The market reached a two-month low on Tuesday.

The United States and Iran had not announced a peace agreement, however, and attacks on vessels and energy infrastructure had not stopped. Traders were selling the possibility of less disruption, not reacting to a settlement that had restored normal shipping.

December WTI crude oil futures are lower for the week, but the market has recovered a good portion of its early loss. The contract opened at $90.83, broke to $83.88, then rallied back to $88.20. At that price, WTI is down $2.63 for the week, or 2.90%.

Traders took war premium out of crude after President Trump played down the possibility of new U.S. strikes on Iran. Higher Saudi production and a large build in U.S. inventories gave sellers more to work with. But attacks on Saudi energy infrastructure and continued threats to shipping brought buyers back.

The week opened with traders focused on the possibility of a less aggressive U.S. approach toward Iran.

WTI…

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