Crude Oil Prices Post 7% Gain, Extend Rally to Eight Consecutive Days; US WTI Hits $106
Crude Oil Prices Surge as US-Iran War Continues
The crude oil price, already trading higher for eight consecutive sessions, experienced a significant boost on Wednesday, 29 April, due to the latest data from the Energy Information Administration (EIA). The Brent crude and US West Texas Intermediate (WTI) futures surged by nearly 6% following the EIA's announcement, driving oil prices to new heights.
US Crude Prices Rise 6.61% to $106.58 a Barrel
US crude oil prices rose 6.61% to $106.58 a barrel, while Brent crude prices increased by 5.9% to $117.81 per barrel. This marks the fourth consecutive month of gains for crude oil prices, which have seen a 4% increase in April so far. The oil prices have been on a tear, building on the over 50% rally seen in March, attributed to the onset of the US-Israeli war with Iran.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Energy Supply Disruption and Middle East Crisis
The crude oil prices remain elevated due to the energy supply disruption through the Strait of Hormuz, a critical chokepoint accounting for 20% of global oil passage. The ongoing US-Iran war, which has entered its third month, has led to little signs of resolution. US President Donald Trump's statement that he was unhappy with Iran's latest proposal has further dented hopes of a swift resolution to the conflict.
US Naval Blockade and Impasse
The US has signaled that it will stick with a naval blockade of Iranian ports as it tries to force Tehran back to the negotiating table. The blockade lies at the heart of the impasse, with the Islamic Republic insisting it won't restart negotiations or reopen the Strait of Hormuz as long as the naval restrictions stay in place.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
| Month | Crude Oil Price Increase |
|---|---|
| March | Over 50% |
| April (as of 29 April) | 4% |
| Week Ending | Crude Inventories | Draw |
|---|---|---|
| 24 April | 459.5 million barrels | 6.2 million barrels |
| Analysts' Expectations (as of 24 April) | 231,000 barrels |
US Turns into a Net Crude Exporter
The United States has turned into a net crude exporter on a weekly basis for the first time on record, according to a Reuters report. Oil prices surged after US oil stockpiles plummeted last week due to surging global demand amid the war.
Investor Takeaway
Crude oil prices are expected to remain elevated due to the ongoing US-Iran war and energy supply disruption.
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