(RTTNews) – Rising for the fifth straight session, crude oil posted sharp gains on Wednesday as the probability of U.S. intervention to end the crisis in Iran raises supply-related concerns.
WTI Crude Oil for February delivery was last seen trading up by $0.76 (or 1.24%) at $61.91 per barrel.
The civil uprising against the regime in Iran that started in December is escalating day by day.
The nation faces a total “internet blockade” though Starlink services is offering free connectivity, which the protestors are using to highlight the oppressive measures adopted by the Iranian government to suppress the protests.
With reports indicating that the authorities are conducting executions of captured protestors, U.S. President Donald Trump warned Iran that the U.S. would intervene and hit Iran hard.
In a message to the demonstrators, Trump stated, “Help is on the way.”
Trump also warned that nations that engage in trade with Iran would be slapped a new 25% tariff.
The crisis in Iran has added a geopolitical risk premium to oil prices.
Iran is the fourth major producer in the OPEC alliance, and the nation controls the strategic chokepoint for global oil flows.
After U.S. forces met success in capturing Venezuelan President Nicolas Maduro and extradited him to the U.S. to put him on trial for several criminal charges, Trump has accelerated steps to utilize the rich oil reserves in Venezuela.
Yesterday, Trump announced that oil worth around $5 billion is set to enter the U.S. from Venezuela.
Separately, Trump has been pushing U.S. and European oil majors to invest in Venezuela to replenish the dilapidated oil infrastructure in that country and in return, assured safety on their investments and security to the workforces.
Oil corporations are yet to take a final call on Trump’s request.
Since the middle of December, U.S. forces have captured at least five tankers from Venezuela.
Venezuela’s state-owned oil company PDVSA announced that it is preparing to sell crude oil to the U.S. government.
Vitol and Trafigura are offering logistical and marketing support to the U.S. in selling the Venezuelan oil.
In the U.S., the American Petroleum Institute data on inventories revealed that the U.S. crude oil inventories rose by 5.27 million barrels for the week ending January 9, sharply reversing a 2.8-million-barrel build in the prior week.
According to the U.S. Energy Information Administration, for the week ending January 9, crude oil inventories in the U.S. increased by 3.39 million barrels. At the Cushing, Oklahoma delivery hub, inventories increased by 745,000 barrels.
For the same period, while gasoline inventories increased by 8,977,000 barrels, distillate inventories saw a decrease by 29,000 barrels and heating oil inventories decreased by 745,000 barrels.
The U.S. tariffs are awaiting a legal ruling by the U.S. Supreme Court. The Supreme Court was set to deliver a verdict today but left the case unresolved without assigning a future date, thereby extending the uncertainty over Trump’s tariffs.
Early this week, the U.S. Federal Reserve confirmed that the U.S. Department of Justice has initiated a criminal investigation against Fed Chair Jerome Powell for his alleged misdeeds in the finances of Fed building renovation.
Viewing this as an attack on the Fed’s independence, leading central bank chiefs have jointly written a letter to Powell expressing solidarity with him.
Distancing himself from the investigation, Trump merely stated that Powell may go soon.
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