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It was not a positive week for most commodities, although crude oil bucked the negative trend on the back of ongoing geopolitical concerns between Iran and the US.
WTI for February delivery traded at $99.56 a barrel on Thursday afternoon, representing a 0.2% gain on the week. Crude oil found support after Iranian officials told the state-run Islamic Republic News Agency that Iran will close the Strait of Hormuz if the US embargoes the country’s oil exports. The Strait of Hormuz is a strategic area that sees approximately 15 million barrels of oil pass through it per day.
The closure would naturally restrict global crude oil supply and push prices up to a new equilibrium level. Looking ahead, traders will closely monitor the US Department of Energy’s inventory report on Thursday afternoon for cues on market direction. The report may show that crude oil supplies fell by 2.5 million barrels. Meanwhile, a separate report from the American Petroleum Institute showed that crude oil inventories rose by 9.57 million barrels last week.
