WTI edges lower to near $72.30 despite the US, UK air strikes on the Iran-backed Houthi

West Texas Intermediate (WTI) oil price struggles to break a three-day losing streak on Monday. Crude oil prices have trimmed their intraday gains despite escalated geopolitical tension in the Middle East, where the United States (US) and the United Kingdom (UK) conducted new air strikes on the Iran-backed Houthi militant group in Yemen on Saturday. As of now, the WTI oil price trades around $72.30 per barrel during the Asian session.

The latest strikes were in response to a drone strike that resulted in the death of three US service members in Jordan. In retaliation, Yemen's Houthi rebels have vowed to extend their military operations. Meanwhile, the White House national security adviser, Jake Sullivan, warned on Sunday that US airstrikes on Iranian-backed militias in the Middle East were just the beginning of a sustained response. Sullivan did not rule out the possibility of strikes on Iranian soil.

The blockbuster job data from the United States (US) has diminished the likelihood of March interest rate cuts by the Federal Reserve. The prospect of higher interest rates can have a dampening effect on economic growth and oil demand in major economies, leading to a decrease in Crude oil prices.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) are anticipated to encounter a long-term challenge in 2024 and 2025. This challenge stems from OPEC+ efforts to undercut global supply by implementing strict production quotas on member nations. However, the concern is that non-OPEC producers, including the United States, could potentially outstrip the OPEC+ supply cuts and oversupply global markets.