WTI surges to $85.00 amid Israel-Iran tensions

• WTI snaps the three-day winning streak near $85.00 on Friday.
• Israel retaliates as missiles strike a site in Iran, boosting the black gold price.
• The expectation that the US Fed will delay interest rate cuts to September might cap the WTI’s upside.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $85.00 on Friday. The black gold gains traction on the day amid the escalating tension between Israel and Iran after a US official confirmed that Israeli missiles had hit a site in Iran.

On Friday, ABC News reported that explosions were heard at an airport in the Iranian city of Isfahan but the cause was not immediately known. Several flights were diverted over Iranian airspace. Over the weekend, Iran unleashed hundreds of drones and missiles in retaliation for a purported Israeli raid on its Syrian embassy building. The tension between Israel and Iran heightened concerns of a wider conflict in the Middle East, triggering the fear of oil supply disruption.

On the other hand, several Fed officials have made hawkish comments in recent days. Atlanta Fed President Raphael Bostic said that US inflation is too high and Fed still has a way to go on inflation, while New York Fed President John Williams emphasized that the Fed is data dependent and he doesn’t feel an urgency to cut rates. Earlier this week, Fed Cleveland President Loretta Mester said that inflation is higher than expected and the central bank needs more confidence in its trajectory.