WTI reaches six-week highs near $60.00 on supply fears, US tariffs
- WTI price hits a six-week high of $59.90 on supply fears.
- President Trump said he will impose 25% tariffs on countries trading with Iran, escalating pressure amid domestic protests.
- Geopolitical tensions escalated after Russian forces struck Ukraine’s two largest cities early Tuesday.
West Texas Intermediate (WTI) Oil price extends its gains for the fourth successive session, trading around $59.70 per barrel during the European hours on Tuesday. WTI price climbs to six-week highs amid supply concerns after US President Donald Trump announced new tariffs targeting Iran’s trading partners.
President Trump said on Monday that he would impose 25% tariffs on goods from any country doing business with Iran, stepping up pressure on Tehran amid widespread domestic protests. He added that the measure would take effect immediately, without providing further details.
Iran, one of the Organization of the Petroleum Exporting Countries’ (OPEC) largest producers, is grappling with its biggest anti-government protests in years. Trump said on Sunday that Iran’s leadership had reached out seeking “to negotiate” after his threats of military action, but warned that “we may have to act before a meeting.”
Geopolitical tensions intensified after Russian forces attacked Ukraine’s two largest cities early Tuesday, Ukrainian officials said. Supply concerns also grew as Kazakhstan’s output faces headwinds from adverse weather, maintenance work, and damage to Russian infrastructure linked to Ukrainian strikes.
Reuters cited a source familiar with the matter saying Exxon Mobil remains interested in visiting Venezuela and is ready to send an assessment team, a day after US President Donald Trump said he might bar the company from the country. Exxon CEO Darren Woods said at a White House meeting on Friday that Venezuela would need to enact legal reforms and protect investments before Exxon commits to operating there.
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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