WTI crude oil hits $106 amid global supply squeeze

WTI crude oil prices have surged, with prices reaching $106.31, marking the highest levels since May. This upward trend is driven by a significant supply squeeze, with oil prices rising in 11 of the last 12 days.

Market volatility is being fueled by geopolitical tensions and infrastructure disruptions. The conflict involving Iran has extended into its seventh month, and Houthi actions have damaged a Saudi Arabian east-west pipeline, with repairs estimated to take three to six weeks. Additionally, protests in Libya have led to the closure of some oil fields.

Refined products are also seeing extreme pressure, with diesel prices reaching record highs. In the United States, political discussions have emerged regarding the potential limitation of diesel exports.

The energy market instability is spilling over into global financial markets. US 10-year Treasury yields have reached 5.04%, the highest level since 2007, with similar trends observed in Germany and Japan. This occurs as the Federal Reserve faces pressure to manage inflation, which is currently exceeding 3%.