Ahead of the EIA inventory data release, Middle East supply risks boosted crude oil futures.
2026-03-04 21:44:24
U.S. West Texas Intermediate (WTI) crude oil futures rose slightly on Wednesday. Market focus was on the supply side, with ongoing conflict in the Middle East disrupting oil shipments in the region, providing support for oil prices ahead of today's official U.S. inventory report.
At 21:40 Beijing time, WTI crude oil was trading at $73.95 per barrel, down 0.82%.
Trump's tanker escort plan eased market concerns, but doubts remain.
After a sharp jump in oil prices earlier this week, the market moved relatively calmly in early trading today. This followed President Trump's statement that the U.S. Navy could assist oil tankers passing through the Strait of Hormuz via escort services to ensure the safe transport of oil.
The Strait of Hormuz is crucial for the smooth flow of oil, as approximately 20% of global oil production is transported through it. If the waterway is blocked, oil supplies to regions such as Europe could be disrupted.
The range-bound trading suggests that traders still expect the conflict to end in the short term.
Traders are currently betting primarily on the risk of large-scale supply disruptions, which is the main driver of this round of oil price increases; at the same time, they are also closely watching for signs of easing tensions, which could reverse the upward trend if such signs appear.
This week's daily chart continues to show a range-bound trading pattern, indicating that the market still believes the conflict will end quickly, as Trump has stated. However, he may not have considered the risk that Iran could escalate the conflict by bombing neighboring countries' oil facilities.
Even if the strait remains open, insurance risks could still limit oil transportation.
Stabilizing the Strait of Hormuz is crucial to curbing oil prices. However, if oil production facilities are damaged and repairs take months, oil prices will remain high, pushing up inflation and causing a significant impact on the global economy. Gasoline prices in the United States have already risen sharply.
Even if the strait remains open, it remains questionable whether oil companies' tankers can obtain insurance for their cargo. Therefore, even if the U.S. Navy plans to escort passing ships, it does not necessarily mean that there is actually oil available for transport in the area.
Iran's energy facilities attacked; Iraq announces production cuts
Reduced supply or slower transportation could lead to oil shortages. According to Reuters, the US military struck an Iranian energy facility in an area that produces nearly a third of global oil.
Meanwhile, Iraq has already cut production by about half, and may further reduce production if exports do not recover quickly.
API inventory unexpectedly surged; awaiting EIA report.
Other supply-side news: The American Petroleum Institute (API) reported that crude oil inventories increased by 5.6 million barrels last week, far exceeding the expected 2.3 million barrels.
Later today, the U.S. Energy Information Administration (EIA) will release official inventory data, with the market expecting an increase of 3 million barrels.
Technical Analysis: The price range of $77.98 to $84.52 forms a resistance level.
(WTI crude oil daily chart source: FX678)
April WTI crude oil futures daily chart:
The current trend remains upward, but oil prices face multiple resistance levels, including yesterday's high of $77.98, as well as multi-month highs of $78.40, $80.77, and $84.52.
The current market is driven by news, and continued positive news is needed to support the bulls; otherwise, a pullback may occur within the day. Oil prices have shown a similar trend every day this week.
The normal pullback target is the retracement range of $70.79 to $69.09; if negative news emerges, it may even break below the trendline support at $66.45.
At 21:40 Beijing time, WTI crude oil was trading at $73.95 per barrel, down 0.82%.
Trump's tanker escort plan eased market concerns, but doubts remain.
After a sharp jump in oil prices earlier this week, the market moved relatively calmly in early trading today. This followed President Trump's statement that the U.S. Navy could assist oil tankers passing through the Strait of Hormuz via escort services to ensure the safe transport of oil.
The Strait of Hormuz is crucial for the smooth flow of oil, as approximately 20% of global oil production is transported through it. If the waterway is blocked, oil supplies to regions such as Europe could be disrupted.
The range-bound trading suggests that traders still expect the conflict to end in the short term.
Traders are currently betting primarily on the risk of large-scale supply disruptions, which is the main driver of this round of oil price increases; at the same time, they are also closely watching for signs of easing tensions, which could reverse the upward trend if such signs appear.
This week's daily chart continues to show a range-bound trading pattern, indicating that the market still believes the conflict will end quickly, as Trump has stated. However, he may not have considered the risk that Iran could escalate the conflict by bombing neighboring countries' oil facilities.
Even if the strait remains open, insurance risks could still limit oil transportation.
Stabilizing the Strait of Hormuz is crucial to curbing oil prices. However, if oil production facilities are damaged and repairs take months, oil prices will remain high, pushing up inflation and causing a significant impact on the global economy. Gasoline prices in the United States have already risen sharply.
Even if the strait remains open, it remains questionable whether oil companies' tankers can obtain insurance for their cargo. Therefore, even if the U.S. Navy plans to escort passing ships, it does not necessarily mean that there is actually oil available for transport in the area.
Iran's energy facilities attacked; Iraq announces production cuts
Reduced supply or slower transportation could lead to oil shortages. According to Reuters, the US military struck an Iranian energy facility in an area that produces nearly a third of global oil.
Meanwhile, Iraq has already cut production by about half, and may further reduce production if exports do not recover quickly.
API inventory unexpectedly surged; awaiting EIA report.
Other supply-side news: The American Petroleum Institute (API) reported that crude oil inventories increased by 5.6 million barrels last week, far exceeding the expected 2.3 million barrels.
Later today, the U.S. Energy Information Administration (EIA) will release official inventory data, with the market expecting an increase of 3 million barrels.
Technical Analysis: The price range of $77.98 to $84.52 forms a resistance level.
(WTI crude oil daily chart source: FX678)
April WTI crude oil futures daily chart:
The current trend remains upward, but oil prices face multiple resistance levels, including yesterday's high of $77.98, as well as multi-month highs of $78.40, $80.77, and $84.52.
The current market is driven by news, and continued positive news is needed to support the bulls; otherwise, a pullback may occur within the day. Oil prices have shown a similar trend every day this week.
The normal pullback target is the retracement range of $70.79 to $69.09; if negative news emerges, it may even break below the trendline support at $66.45.
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