WTI Oil Drops Below $93 as Inventory Build Offsets Risk

Key Moments

WTI trades below $93.00, falling more than 2.5% and hovering near Monday’s weekly low.
US crude inventories rose by 6.56 million barrels in the week ending March 13, which adds pressure on prices.
Meanwhile, the escalating conflict involving the US, Israel, and Iran keeps geopolitical risks elevated after the closure of the Strait of Hormuz.

WTI Pulls Back Despite Earlier Gains

West Texas Intermediate (WTI) crude oil prices struggle to extend the previous session’s modest gains. Instead, fresh selling pressure emerges during the Asian session on Wednesday. As a result, the benchmark trades below the $93.00 mark.

Currently, prices show a loss of more than 2.5% on the day. Moreover, the commodity is trading close to the weekly low recorded on Monday.

Inventory Build Weighs on Market Sentiment

According to sources citing data from the American Petroleum Institute, US crude oil inventories increased by 6.56 million barrels in the week ending March 13. Consequently, the unexpected build in stockpiles triggers renewed selling pressure in WTI.

However, traders continue to monitor supply risks and geopolitical developments. While the inventory data pushes prices lower, uncertainty around production and exports may still limit deeper losses in the near term.

Middle East Conflict and Strait of Hormuz Disruption

The conflict involving the United States, Israel, and Iran has now entered its third week. So far, there are no clear signs of de-escalation. In fact, a senior Iranian official confirmed that Iran’s new supreme leader rejected proposals for easing tensions that intermediary nations delivered.

At the same time, the Strait of Hormuz remains closed. This key maritime route handles roughly 20% of global oil supply. Therefore, the disruption continues to affect global energy trade flows.

Meanwhile, US forces struck targets along Iran’s coastline near the Strait of Hormuz. In addition, Israeli airstrikes on Tuesday killed Iran’s top security official Ali Larijani and Basij paramilitary leader Gholamreza Soleimani. Shortly after, Iran’s army chief Amir Hatami warned that Tehran’s response to the assassinations would be decisive.

Market Reaction and Fed Rate Expectations

Despite the inventory-driven decline, geopolitical tensions continue to support crude oil prices. As a result, the conflict and shipping risks help keep a floor under the market.

However, recent price action suggests that traders may have already priced in much of the geopolitical risk. Therefore, additional upside momentum appears limited for now.

At the same time, expectations for fewer interest rate cuts from the US Federal Reserve support the US Dollar (USD). A stronger dollar typically pressures dollar-denominated commodities such as oil. Consequently, traders remain cautious about opening new bullish positions in WTI.