WTI recovers above $68.50 on a large surprise crude draw

• WTI price rebounds to near $68.75 in Wednesday’s early Asian session. 
• US crude oil stocks fell by 5.935 million barrels last week, according to the API on Tuesday.
• The possible Middle East peace deal caps the WTI’s upside. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $68.75 on Wednesday. The WTI price edges higher amid the uncertainty for the US oil industry and the large surprise crude draw. 

US President-elect Donald Trump said he would impose a 25% tariff on all products coming into the US from Mexico and Canada. The US oil industry might face an unpredictable outlook if Trump follows through on newly promised blanket tariffs on imports from these countries. 

"These would obviously be very economically disturbing tariffs if they were put into place," Josh Zive, senior principal at Bracewell LLP, told S&P Global Commodity Insights. "This is what, probably initially, ends up persuading them not to impose them—the energy sector is one that's going to be hit most dramatically by these sorts of tariffs,” added Zive.

A decline in US crude inventories last week might boost the black gold price. The American Petroleum Institute (API) weekly report showed Crude oil stockpiles in the United States for the week ending November 22 fell by 5.935 million barrels, compared to a rise of 4.753 million barrels in the previous week. The market consensus estimated that stocks would increase by just 250,000 barrels.

Investors will closely monitor the developments surrounding the ongoing geopolitical tensions in the Middle East. On Tuesday, Israel approved a ceasefire agreement with Lebanon’s Hezbollah militants that would end nearly 14 months of fighting linked to the war in the Gaza Strip, per the AP News. The easing geopolitical risks could drag the WTI price lower.