WTI edges higher above $71.00 on China stimulus, geopolitical risks

• WTI gains ground near $71.30 in Wednesday’s early Asian session, the highest since September 2. 
• Chinese stimulus plan and continued fear over Middle Eastern tensions underpin the WTI price. 
• US Crude oil inventories fell by 4.339 million barrels for the week ending September 20, according to the API. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $71.30 on Wednesday. WTI price edges higher amid the positive development surrounding Chinese stimulus measures and ongoing geopolitical tensions in the Middle East. 

Additional stimulus measures from China have provided some support to the WTI price as China is the world's top crude importer. People’s Bank of China (PBoC) unveiled a broad package of monetary stimulus measures to revive the economy. "The Chinese government's announcement of its largest stimulus package since the pandemic, combined with the sudden rise of geopolitical tension in the Middle East ... has dealt a blow to the bearish sentiment that dominated the oil markets in the past three weeks," said Claudio Galimberti, global market analysis director at Rystad Energy.

Meanwhile, the escalating geopolitical tensions in the Middle East contribute to the WTI’s upside as it raises concerns about oil supply disruptions. Israel has attacked Hezbollah in Lebanon every day for the past week from commander assassinations to the destruction of missile launchers, per Bloomberg. 

US crude oil inventories fell more than expected last week. According to the American Petroleum Institute (API), crude oil stockpiles in the United States for the week ending September 20 fell by 4.339 million barrels, compared to an increase of 1.960 million barrels in the previous week. The market consensus estimated that stocks would decline by just 1.100 million barrels.

Oil traders will take more cues from the weekly EIA Crude Oil stockpiles report, which is due later on Wednesday. Additionally, Federal Reserve Governor Adriana Kugler is scheduled to speak later in the day.