Oil Rises Despite Surge in US Stockpiles, Iran Risks Grow
Oil prices strengthened in Wednesday's trading, as Middle East tensions centered on Iran once again dominated market sentiment, overriding negative signals from surging US crude inventories. Investors believe geopolitical risks are now a more important determinant of price direction than short-term inventory data.
The benchmark Brent crude oil price has returned above $69 per barrel, while WTI held around $65 per barrel. At 11:57 a.m. Singapore time, the April Brent contract rose 0.8% to $69.36, and the March WTI contract rose 0.9% to $64.52.
This strengthening was triggered by a series of reports that increased the "risk premium." These included news that the US was considering seizing tankers carrying Iranian crude oil and the possibility of sending additional aircraft carriers to the region if negotiations on Iran's nuclear program fail. This situation has led market participants to reconsider scenarios of supply disruptions and retaliatory responses from Tehran.
Regarding US fundamentals, a report from the American Petroleum Institute (API) showed that crude oil inventories rose by 13.4 million barrels last week. If confirmed by official data, the increase would be the largest since November 2023—a factor that typically puts downward pressure on prices because it indicates increasing supply or softening demand.
The political agenda also adds to uncertainty. US President Donald Trump stated that Iran “wants to make a deal” but emphasized the consequences if negotiations go badly. Trump is scheduled to meet Israeli Prime Minister Benjamin Netanyahu at the White House, and Netanyahu's side is said to be pushing for broader discussions—not just nuclear issues, but also long-range weapons capabilities and regional proxy networks. Market participants see this meeting as increasing headline risk, although oil prices often subside in the absence of concrete follow-up action.
Looking ahead, the market awaits OPEC's monthly report on the global demand and supply outlook, followed by analysis from the International Energy Agency (IEA) on Thursday. The IEA previously highlighted the potential for a surplus if supply growth outpaces demand—a factor that could act as a counterbalance to the geopolitical narrative currently driving prices. (asd)
Source: Bloomberg.com
