WTI extends gains near $89.10 on SPR refill plans, escalating tensions in Middle-East

Western Texas Intermediate (WTI) oil price continues the winning streak for the fourth successive day, trading higher around $89.10 per barrel during the Asian session on Friday.

The surge in oil prices can be linked to concerns that the Israel-Gaza conflict may escalate across the Middle East, potentially disrupting supplies from one of the world's leading production regions.

Crude oil prices have continued to climb for the second consecutive week, propelled by heightened tensions in the Middle East. An explosion at a Gaza hospital and the looming possibility of a ground invasion by Israeli troops have intensified fears of an escalation in the conflict.

Additionally, low inventories in the United States (US), contributed to the supportive backdrop for oil prices. The US government has laid out plans to initiate the process of refilling the country's Strategic Petroleum Reserve (SPR). This move is part of broader efforts to bolster the nation's energy security and ensure a sufficient emergency stockpile of oil.

The US government is making moves to purchase 6 million barrels of crude oil for delivery to the SPR in December and January, part of an ongoing effort to replenish the emergency stockpile, as announced by the US Department of Energy on Thursday.

Top oil producers, Saudi Arabia and Russia extend supply cuts until the end of the year, expecting a widening deficit in the fourth quarter.

In another development, the temporary lifting of US oil sanctions on Venezuela is not expected to necessitate immediate policy changes by the OPEC+ producer group. Sources within OPEC+ conveyed to Reuters that any recovery in production from Venezuela is likely to be gradual, minimizing the need for swift adjustments in the group's policies.

The combination of production cuts and reduced inventories underscores the market's sensitivity to supply-demand dynamics, providing ongoing support to oil prices.