WTI declines below $82.50 as oil inventories rise far more than expected
- WTI price edges lower to near $82.45 in Thursday’s early Asian session.
- EIA sees a massive surge in US crude oil inventories.
- Talks between the US and Iran appear deadlocked as both sides harden their positions.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $82.45 during the early Asian trading hours on Thursday. WTI declines on a larger-than-expected build in US crude oil inventories. Traders will closely monitor the developments surrounding US-Iran talks for fresh impetus.
US crude oil inventories climbed by more than expected last week. According to the US Energy Information Administration (EIA), crude oil stockpiles in the US for the week ending August 7 jumped by 17.422 million barrels, compared to an increase of 2.479 million barrels in the previous week. The market consensus was for a decline of 1.4 million barrels.
Traders await signs of progress toward reopening the Strait of Hormuz. A senior Iranian official stated the US and Iran remain at loggerheads over efforts to agree a permanent end to the war in the Middle East, saying that there had been no progress in talks to revive the interim deal agreed in June and define a time frame to implement it.
US President Donald Trump said on Wednesday that Washington has "total control" over the Strait of Hormuz. Iran pushed back on Trump’s claim, insisting the critical waterway remains blocked. Fears of oil supply disruption could boost the WTI price in the near term.
Rabobank doubts lasting relief from any short-term Hormuz transit deal
Rabobank’s energy strategists caution that hopes for a quick diplomatic fix to shipping disruptions in the Strait of Hormuz may be misplaced. They argue that “a short-term deal to open up the Strait of Hormuz for commercial shipping is unlikely as both sides have very little common ground,” noting that such an arrangement “offers no permanent solutions for the key sticking points that the whole conflict centers around.” Instead, Rabobank expects any agreement to amount to “another 60-day window of free transits through Hormuz while further negotiations resume,” underscoring their view that geopolitical risk around key chokepoints will remain an important driver of Brent and WTI volatility.
Technical Analysis: The bearish outlook of WTI remains intact
In the daily chart, WTI US Oil trades at $81.55. The near-term tone is bearish as price is capped beneath the 100-day Simple Moving Average (SMA) at $86.67 and continues to press under the Bollinger Bands’ 20-day middle band at $81.67, leaving the broader uptrend under pressure. The Relative Strength Index (14) at 52.55 sits in neutral territory, hinting at consolidative momentum rather than a strong directional push, which reinforces the idea of a capped market while these overhead levels remain intact.
On the topside, immediate resistance appears at the Bollinger 20-day SMA around $81.67, followed by the 100-day SMA at $86.67, with the Bollinger upper band near $90.16 forming a higher barrier should buyers regain control. On the downside, initial support is located at the Bollinger lower band near $73.18, where a break would open the way for a deeper corrective slide, while holding above this floor would merely extend the current range-bound consolidation beneath the major moving average ceiling.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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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