WTI trades around $74.50 after paring gains, downside seems limited due to supply concerns

• WTI retreats from five-month high of $74.40, which was marked on Friday.
• Israel warned of a missile and drone attack from Iran following Israel's attack on Iranian sites.
• Iran withdrew from the sixth round of talks with the United States following Israel's attack.

West Texas Intermediate (WTI) Oil price pared its daily gains after reaching a five-month high of $74.40, currently trading around $71.80 per barrel during European hours on Friday. Crude Oil prices surged due to rising concerns regarding supply disruptions. The escalating tensions in the Middle East threaten to disrupt the Strait of Hormuz, a key route for about 20% of global Oil transportation.

Israel expects a missile and drone attack from Iran following Israel's preemptive attack on dozens of Iranian sites to dismantle its nuclear program, noted by Israeli Minister of Defense, Israel Katz. Kats also declared a special state of emergency in the country, per Axios.

Moreover, White House Secretary of State Marco Rubio released a statement that "Tonight, Israel took unilateral action against Iran. We are not involved in strikes against Iran, and our top priority is protecting American forces in the region." "Let me be clear: Iran should not target US interests or personnel," Rubio added.

In response to the Israeli attack, Iran pulled out of the sixth round of talks between the United States (US) and Iran scheduled for Sunday, Iran International cited Aladdin Boroujerdi, a member of parliament's National Security and Foreign Policy Commission.

Moreover, the US Energy Information Administration (EIA) released Crude Oil Stocks Change, showing a decline of 3.6 million barrels in the previous week, exceeding forecasts of a 2 million-barrel decline. The decline in Oil inventories signals strong demand.