West Texas Intermediate (WTI) crude oil is trading at approximately $69.15 during the early Asian session on Wednesday, continuing its upward momentum. The increase follows a larger-than-expected drop in US crude inventories and rising concerns over tighter global oil supply, driven by potential US tariffs on countries purchasing Venezuelan oil.
Crude Inventories Drop More Than Expected
The American Petroleum Institute (API) reported a significant decrease in US crude stockpiles for the week ending March 14, with a drop of 4.6 million barrels, far surpassing the forecasted reduction of 2.5 million barrels. This marks a stark contrast to the previous week’s increase of 4.593 million barrels, further bolstering market optimism.
US Tariff Concerns Support Price Surge
Adding to the bullish sentiment, US President Donald Trump announced on Monday that a 25% tariff would be imposed on all oil and gas imports from countries purchasing Venezuelan energy products, effective April 2. The move, which also includes new tariffs on Venezuela itself, raised concerns about further tightening global oil supply, propelling WTI prices to a three-week high.
Ceasefire Deal Could Weaken Price Momentum
However, offsetting some of these supply concerns, the United States has reached agreements with Ukraine and Russia to halt maritime and energy attacks. In addition, Washington is reportedly exploring the possibility of easing certain sanctions on Moscow. This development could temper some of the supply worries, potentially putting downward pressure on WTI prices in the near term.
