WTI rises toward $60.00 as Kazakhstan oilfield output halted
- WTI climbs after Kazakhstan suspended output at the Tengiz and Korolev oilfields due to power issues.
- Oil prices may face pressure as geopolitical tensions rise after President Trump reiterated his Greenland ambitions.
- US forces seized a seventh Venezuela-linked oil tanker to enforce sanctions and disrupt the country’s oil trade.
West Texas Intermediate (WTI) Oil price extends its winning streak for the fourth consecutive day, trading around $59.80 per troy ounce during the Asian hours on Wednesday. Crude Oil prices gain on a temporary halt in output at two large fields in Kazakhstan.
OPEC+ (Organization of the Petroleum Exporting Countries and its allies) producer Kazakhstan suspended production at the Tengiz and Korolev oilfields on Sunday due to power distribution problems. According to three industry sources cited by Reuters, output at the two fields could remain offline for another seven to ten days.
Oil prices may face pressure amid rising geopolitical tensions after President Trump reiterated his Greenland ambitions and earlier threats of 10% tariffs on eight EU countries, raising concerns about slower economic growth and weaker global Oil demand.
Meanwhile, the European Union signaled potential duties on $93 billion of US goods, while France reportedly urged use of the bloc’s Anti-Coercion Instrument. Markets also fear that Europe could leverage roughly $10 trillion in US assets, with a Danish pension fund planning to exit Treasuries.
US crude and gasoline inventories were expected to increase last week, while distillate stocks were forecast to decline ahead of the US Energy Information Administration (EIA) data. Separately, US forces seized a seventh Venezuela-linked Oil tanker as part of stepped-up efforts to enforce sanctions and disrupt the country’s Oil trade.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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