WTI rises on Middle East tensions and softer US Dollar

• WTI crude extends gains for the second straight day, with spot price hovering below $67.00.
• WTI advances amid flaring Middle East tensions and a softer US Dollar.
• Geopolitical risks rise amid US tariff threats and potential Russia sanctions.

West Texas Intermediate (WTI), the US Crude Oil benchmark, extends gains for the second straight day on Friday, with spot prices hovering around $66.90 during the American trading hours, up nearly 1% on the day.

The upside emerges amid renewed supply-side jitters and a softer US Dollar, which makes dollar-denominated commodities more attractive to foreign buyers. Still, price action remains confined within a narrow $65.00-$68.00 range, highlighting the ongoing tug-of-war between supply fears and tepid demand.

The latest uptick in Oil prices follows ongoing supply disruptions in Iraq's Kurdistan region, where a fourth consecutive day of drone strikes has cut production nearly in half, from around 280,000 barrels per day to just 150,000. The supply shock coincides with a sharper-than-expected decline in US crude inventories. Data from the Energy Information Administration (EIA) showed stockpiles declined by 3.8 million barrels in the week ending July 11, reversing a prior 7.07 million-barrel build. US inventories are now nearly 8% below their five-year seasonal average, underscoring robust domestic consumption and limited spare capacity.

Adding to the bullish backdrop, markets are also reacting to concerns over potential United States (US) tariffs and sanctions on Russia, which could further disrupt global flows. Seasonal factors are amplifying the pressure, with peak summer travel in the US lifting demand for gasoline. Meanwhile, the International Energy Agency (IEA) recently warned that the oil market may be tighter than previously anticipated, citing resilient summer demand.