In recent weeks, the price of West Texas Intermediate (WTI) crude oil has experienced notable fluctuations, primarily driven by geopolitical tensions and supply concerns. Just before the latest surge, regional tensions escalated following coordinated strikes on Iran by the US and Israel on February 28, raising fears about potential disruptions in oil supply.
On a significant trading day, WTI crude surged more than 10%, reaching $110.31 per barrel after US President Donald Trump threatened to escalate military actions against Iran. This announcement prompted immediate reactions in the market, with Brent crude oil also jumping nearly 8% to $108.90 per barrel at the same time.
As the trading session progressed, WTI crude oil prices surged further, increasing by 13% to surpass $112 per barrel. The price opened at $99.15 per barrel before climbing to a peak of $112.01 during the session, marking its highest intraday level since September 2023.
The trading volume during this period reached approximately 2.3 million contracts, a 45% increase over the 30-day average, indicating heightened market activity and investor interest. This surge in trading volume reflects the market’s sensitivity to geopolitical developments and supply dynamics.
Additionally, the U.S. Energy Information Administration reported a drawdown in crude inventories of 4.2 million barrels, further contributing to the upward pressure on prices. Refinery utilization rates also increased to 92.8%, suggesting robust demand for crude oil despite the ongoing uncertainties.
The recent price movements represent one of the most significant single-day changes in WTI crude oil history, with WTI now approximately 35% above its 200-day moving average. Brent crude rose 11.8% to $115.50 per barrel, maintaining its premium over WTI, while the spread between the two narrowed slightly to $3.49.
Market analysts have noted that this surge is not merely a temporary volatility but a fundamental repricing of crude oil based on structural supply constraints that may persist through 2025. Dr. Evelyn Reed stated, “Today’s surge represents more than temporary volatility. We’re witnessing a fundamental repricing of crude oil based on structural supply constraints that may persist through 2025.”
Furthermore, Michael Torres commented on the market dynamics, saying, “The market had been coiled like a spring below $102. Once that level broke, algorithmic systems drove the explosive move higher.” The timing of these developments coincided with seasonal maintenance periods at several major refineries, adding to the complexity of the situation.
As the situation continues to evolve, market participants are closely monitoring geopolitical developments and their potential impact on oil supply and prices. The recent surge in WTI crude oil price underscores the interconnectedness of global events and their influence on energy markets.
