West Texas Intermediate (WTI) US Oil trades higher on Friday, rising 0.76% to around $83.30 after staging a sharp rebound from an intraday low below $80.00.
The Crude Oil has erased some of its weekly losses and is on track to finish the week close to its opening levels after the bearish gap seen at the start of the week
Market sentiment has improved as investors reassess the impact of shipping disruptions through the Strait of Hormuz. According to CommBank, Oil tanker traffic through the strategic waterway has recovered to around 30%-35% of its pre-conflict level. A broader normalization of flows could ease pressure on global supply, explaining part of the heightened volatility seen in recent days.
However, geopolitical risks continue to provide strong support for Oil prices. Ongoing tensions between Iran and the United States (US) remain a major source of uncertainty, while threats to energy infrastructure and key shipping routes continue to maintain a geopolitical risk premium in the market. Fundamentals also remain supportive.