On Monday, March WTI crude oil closed at $65.04, up 1.27%, while March RBOB gasoline settled at $1.99, increasing by 1.65%. This surge follows a maritime advisory from the US Department of Transportation, urging American-flagged ships to avoid Iranian waters near the Strait of Hormuz, elevating risk premiums for crude oil as geopolitical tensions rise.
Concerns persist that failed negotiations over Iran’s nuclear program could lead to military action by the US, potentially disrupting the Strait of Hormuz through which 20% of the world’s oil is transported. Moreover, bearish factors for prices include a reported increase in Venezuelan crude exports to 800,000 barrels per day in January, up from 498,000 bpd in December, and ongoing geopolitical tensions stemming from attacks on Russian oil infrastructure by Ukraine.
As of January 30, US crude oil inventories were 4.2% below the seasonal five-year average, with production at a 14-month low of 13.215 million bpd. Additionally, the number of active US oil rigs increased by one to 412, remaining slightly above a four-year low.
