Surprise Crude Inventories Draw Drives Oil Higher

West Texas Intermediate crude surged higher after crude inventories declined by almost 4 million barrels, indicating we could be seeing a tighter oil market. Crude prices are stabilizing after making a 5-week low and could see further upside if trade talks do not completely fall apart this week. Oil could see buyers return on spare capacity concerns. Geopolitical risks such as Russia’s oil contamination issues, Venezuelan and Iranian sanctions, along with fighting in Libya, could keep crude supported. The Canadian dollar was little changed on the day, not seeing any major benefits from oil’s rebound.

One key story that could greatly influence oil prices over the next couple weeks involves Iran. Iran’s partial withdrawal from a landmark nuclear deal is putting pressure on European and Asian nations to ease restrictions on their Iranian banking and oil sectors. Iran is giving Britain, France, Germany, China and Russia a 60- day deadline, otherwise they will remove caps on uranium enrichment levels and resuming work on its Arak nuclear facility. The US sanctions are having a strong impact to the Iranian economy which is expected to see their recession deepen.

European officials have been critical against President Trump’s decision to reimpose sanctions and ultimately end the accord that was reached under President Obama. If we see some support given to Iran, Trump may answer back with sanctions to countries who help Iran.

Over the next 60 days, we can see the Iran story either lead to further economic weakness to the Gulf Cooperation Council (GCC) or it could lead to a military clash. A growing risk could be Iran’s closing of the Strait of Hormuz, which handles about two-thirds of the world’s seaborne cargoes of crude oil and other petroleum liquids.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya