WTI Crude Oil rebounds with Iran and supply concerns back in focus

• WTI Crude Oil rises above $65.00 as inventories continue to fall.
• Iran's Supreme Leader vows to retaliate against further attacks from the United States.
• The re-escalation of tensions between Israel, Iran and the US may result in a further extension of Oil prices.

West Texas Intermediate (WTI) is rebounding on Thursday after recent inventory data suggested that demand is continuing to outpace supply. 

WTI is currently trading above the $65.00 psychological level with intraday gains of approximately 1.10% at the time of writing. 

With Wednesday's Energy Information of Administration (EIA) report highlighting another sharper than expected drawdown in Oil inventories, supply shortages have provided temporary relief to Oil prices.

Additionally, despite an Israel-Iran ceasefire appearing to remain intact, recent comments from Iran's leader, Ayatollah Ali Khamenei, have provided an additional layer of uncertainty on the credibility of the Israel-Iran truce.

Israel-Iran ceasefire drives Oil lower, but reports suggest that supply remains subdued

Following the announcement that Israel and Iran had officially agreed to a ceasefire agreement on Tuesday, investors cheered, and the price of Oil slumped.

The Middle East tensions that flared up when Israel attacked Iran on June 12 highlighted the sensitivity of prices to the potential disruption of the Strait of Hormuz. 

With markets embracing the potential of a truce between Israel and Iran, WTI Oil fell approximately $10.00 a barrel within 24 hours. However, inventory reports released throughout the week shifted attention to the dynamics of supply and demand. 

On Monday, the price of WTI had peaked at $76.74 before falling to a low of $63.73 on Tuesday.

The EIA report on Wednesday revealed that Oil inventories fell by 5.8 million barrels over the past week, surpassing analyst expectations of a 600K barrel drawdown.

Iran's Supreme Leader vows to retaliate against further attacks by the United States

In the first televised interview since the ceasefire, Iran's Supreme Leader stated that Iran would respond to any further attacks by the US. 

Reuters reports stated that additional comments by Khamenei included that "The US President Trump unveiled the truth and made it clear that Americans won't be satisfied with anything less than surrender... such an event will never happen".

Should these comments transpire into a broader escalation between the two nations, Oil prices could recover as fears over potential supply disruptions come back into focus.