West Texas Intermediate (WTI), the US crude oil benchmark, is trading near $63.80 during early Asian hours on Tuesday. Prices have come under pressure as fears of supply disruptions in the Middle East have softened. Market participants are now turning their attention to the American Petroleum Institute’s (API) weekly inventory report, due later in the day.
Adding to the downside, higher crude exports from Venezuela are increasing global supply expectations. According to Reuters, Venezuela shipped around 800,000 barrels per day (bpd) of crude in January, up sharply from 498,000 bpd in December.
Oil prices also lost momentum after the United States and Iran agreed to continue indirect negotiations, following what both sides described as constructive discussions. Iran’s President Masoud Pezeshkian called the latest round of nuclear talks with Washington “a step forward,” while rejecting what he described as pressure tactics.
That said, renewed geopolitical tensions in the Middle East could still provide support to crude prices. On Monday, the US Department of Transportation issued a maritime advisory urging American-flagged vessels to keep a safe distance from Iranian waters while transiting the Strait of Hormuz, Reuters reported. Meanwhile, Iran’s foreign minister warned that US military bases in the region would be targeted if the country comes under attack.
