WTI remains above $65.00 due to ongoing geopolitical tensions
- WTI may rebound on supply concerns amid US-Iran tensions and stalled Ukraine-Russia talks.
- US-Iran talks remain inconclusive, with Tehran citing a general agreement framework for a possible nuclear deal.
- Ukraine-Russia peace talks in Geneva ended without progress.
West Texas Intermediate (WTI) Oil price edges lower after registering 4.9% losses in the previous session, trading around $65.00 per barrel during the Asian hours on Thursday. Crude Oil prices could regain ground on potential supply risks amid escalating tensions between the United States (US) and Iran, as well as stalled Ukraine-Russia negotiations.
US-Iran discussions remain inconclusive, with Tehran claiming a “general agreement” on the framework of a potential nuclear deal with United States officials. Vice President JD Vance said Iran failed to meet US red lines, while US President Donald Trump reiterated that military action remains on the table. Reports also suggest any US military action may evolve into a prolonged campaign, with Israel pushing for an outcome targeting regime change in the Islamic Republic.
According to Reuters, two days of peace talks in Geneva between Ukraine and Russia ended without progress. Ukrainian President Volodymyr Zelenskiy accused Moscow of delaying US-mediated efforts to end the four-year war. Trump has repeatedly urged Ukraine to accept a deal that may involve significant concessions, as Russian forces continue targeting energy infrastructure and advancing on the battlefield.
On the trade front, India’s state-run Bharat Petroleum Corporation Limited made its first-ever purchase of Venezuelan crude, while HPCL Mittal Energy Limited bought cargoes from the South American producer for the first time in two years, Reuters cited sources.
American Petroleum Institute (API) reported on Wednesday that US Weekly Crude Oil Stock declined by 0.609 million barrels last week, partly reversing the prior week’s 13.4 million-barrel surge, the largest build since January 2023.
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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