The price of West Texas Intermediate (WTI) crude oil is holding steady at approximately $69.30 as trading begins in early Asian markets on Wednesday. This stability comes amidst a backdrop of rising geopolitical tensions following Ukraine’s use of US ATACMS missiles to target Russian territory for the first time. On Tuesday, reports confirmed that Ukraine had struck a facility in the Bryansk region, prompting a strong response from Russia’s defense ministry. The escalation has led President Vladimir Putin to lower the threshold for a potential nuclear response, highlighting the precarious nature of the situation and the possibility of supply disruptions in the oil market.
This renewed conflict between Russia and Ukraine has also drawn attention to potential impacts on global oil supplies. Market experts suggest that the increasing unrest in the region could create upward pressure on WTI prices, at least in the short term. Analysts have noted the heightened risks associated with this conflict, which may affect producers and consumers alike.
Simultaneously, another geopolitical development involves Iran, where the supreme leader has warned of significant retaliation against Israel in response to recent air strikes. Such tensions in the Middle East are likely to cause further unease regarding crude supply, which may also lend support to WTI prices.
Conversely, the current demand dynamics from China, the world’s second-largest oil consumer, are less encouraging. China’s crude oil demand experienced a sharp decline of 5.4% year-over-year in October, leading to increased selling pressure on oil prices. The International Energy Agency forecasts that China’s overall demand growth will only reach around 140,000 barrels per day this year — significantly lower than the previous year’s growth figure of 1.4 million barrels per day. This slowdown in demand from a major market could ultimately weigh on WTI prices in the near future.
