The price of WTI oil fluctuated below $83 per barrel on Wednesday (April 24), decreasing slightly after a nearly 2% increase in the previous session.

Investors have shifted their focus to supply and demand fundamentals as the threat of war between Israel and Iran diminishes.

According to Goldman Sachs, the market appears to be easing somewhat due to rising global oil inventories, with crude oil that had been stuck in transit due to disruptions in the Red Sea now being offloaded. This is alleviating some of the scarcity in the market.

Goldman Sachs also noted that the geopolitical risk premium priced into oil is expected to decrease by $5–10 per barrel in the coming months.

At the end of the trading session on April 24, WTI oil contracts fell 55 cents (or 0.66%) to $82.81 per barrel. Brent oil contracts lost 40 cents (or 0.45%) to $88.02 per barrel.

According to data from the U.S. Energy Information Administration (EIA), U.S. commercial crude oil inventories, excluding the Strategic Petroleum Reserve, declined by 6.4 million barrels last week, marking the largest drop since mid-January 2024.

On Wednesday, U.S. President Joe Biden signed a foreign aid package to expand sanctions on Iran’s oil sector by targeting ports, ships, and refineries that knowingly accept Iranian crude oil exports.

By law, President Biden can waive sanctions for national security reasons, which may limit their impact on the oil market.

Rapidan Energy stated before the bill was passed: “We maintain the view that the Biden administration does not intend to strictly enforce sanctions that could drive global crude oil prices (and subsequently U.S. retail gasoline prices) higher during this election year.”

Oil flows from the Middle East remain uninterrupted by conflict, U.S. production is increasing, inflation remains high, and the Organization of the Petroleum Exporting Countries (OPEC) has enough spare capacity to return to the market in case of an emergency supply situation. Therefore, a sustained spike above $95 per barrel for Brent crude is unlikely at the moment.

Source: Vietstock