- WTI attracts fresh buyers on Thursday amid rising geopolitical tensions in the Middle East.
- The Fed’s hawkish pause lifts the USD to a one-week high and might cap the black liquid.
- Trade-related uncertainties further warrant caution before placing aggressive bullish bets.
West Texas Intermediate (WTI) US Crude Oil prices regain positive traction on Thursday amid concerns that a broader conflict in the Middle East could influence global supply. As the Israel-Iran conflict enters its seventh day, media reports suggest that US President Donald Trump has approved attack plans for Iran, but is holding off to see if Tehran will abandon its nuclear program.
The Israeli Air Force bombed Iran’s Arak heavy water reactor this morning, along with dozens of other military sites overnight. In response, Iran launched a fresh barrage of ballistic missiles, which struck Soroka Hospital in Beersheba in southern Israel, and Holon and Ramat Gan in central Israel. This, along with potential US involvement, raises the risk of an all-out war in the Middle East and acts as a tailwind for Crude Oil prices.
Meanwhile, the US Federal Reserve kept its interest rates steady on Wednesday and projected two rate cuts by the end of 2025. Policymakers, however, forecasted only one 25-basis points rate cut in each of 2026 and 2027. This, in turn, assists the US Dollar (USD) to build on its recent recovery from a three-year low and climb to over a one-week high, which acts as a headwind for USD-denominated commodities, including Oil prices.
Furthermore, the uncertainty surrounding Trump’s trade policies led to concerns about reduced global economic growth, which could potentially dent fuel demand. This might further hold back traders from placing aggressive bullish bets and positioning for a further appreciating move for the black liquid. Nevertheless, Crude Oil prices remain close to a multi-month top and might continue to draw support from rising geopolitical tensions.
