WTI drops to near $76.50 on oil demand uncertainty, Houthis attacks on Israeli vessel

• WTI price extends losses on uncertainty over oil demand due to higher interest rates.
• Iran-led Houthi rebels claimed responsibility for an attack on an Israeli cargo vessel, the MSC Silver.
• United States once again vetoed a draft resolution at the UN Security Council regarding an immediate humanitarian ceasefire.

West Texas Intermediate (WTI) oil price extends its losses for the third successive session on Wednesday. WTI price trades around $76.50 per barrel during the European hours. Crude oil prices decline as market caution grows amid diminishing expectations for early interest rate cuts worldwide. The prospect of higher borrowing costs is expected to dampen global economic activity, consequently reducing demand for oil.

Additionally, Geopolitical conflict in the Middle East leads to concerns about supply disruptions, causing investors to pay higher premiums for futures contracts as a hedge against potential supply shocks. As a result, oil companies are opting to sell crude oil now rather than storing it for future months.

Yemen's Houthi rebels claimed responsibility for an attack on an Israeli cargo vessel, the MSC Silver, in the Gulf of Aden. The Houthi leader stated on Tuesday that further attacks on Israel were planned, potentially targeting Israeli ships in the Red Sea and the Bab al-Mandeb Strait. On Monday, the Houthi group launched additional drone and missile strikes on four shipping vessels in the Red Sea and Bab al-Mandab Strait.

Meanwhile, on Tuesday, the United States once again vetoed a draft resolution at the United Nations Security Council regarding the Israel-Hamas conflict. This action blocked a call for an immediate humanitarian ceasefire. Washington is advocating for the Security Council to adopt a resolution linking a ceasefire to the release of Israeli hostages by Hamas.

US Energy Information Administration’s (EIA) Crude Oil Stocks Change and American Petroleum Institute’s (API) Weekly Crude Oil Stock for the week ending on February 16 will be released later in the North American session.