West Texas Intermediate (WTI) crude oil has extended its rally, trading around $71.70 during the early Asian session on Wednesday. The rise is primarily driven by concerns over potential supply disruptions from Russia.
Supply Disruptions Spark Rally
The price of WTI is climbing following reports of a Ukrainian drone attack on a key Russian pipeline pumping station, which has affected Kazakhstan’s crude oil exports. Russian Deputy Prime Minister Alexander Novak confirmed that oil flows through the pipeline have been reduced by 30-40%. Reuters estimates this decrease could lead to a reduction of 380,000 barrels per day in oil supplies.
Global Trade Concerns Cap Gains
Despite the positive supply-side news, traders are cautious of geopolitical risks. Developments regarding new tariff policies from US President Donald Trump are adding uncertainty to the market. Last week, Trump ordered his administration to consider imposing reciprocal tariffs on a range of trading partners. On Tuesday, he hinted at a likely 25% tariff on foreign cars, while semiconductor chips and drugs are expected to face higher duties. These concerns over a potential global trade war could cap further gains in oil prices.
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