WTI Oil prices consolidate around $63.50 ahead of the Putin-Trump meeting
- Crude prices fluctuate around $63.50 after bouncing up from Friday's lows at $62.30.
- Upside attempts remain limited with all eyes on the Trump-Putin meeting this week.
- The possibility of further sanctions against Russia has offset the consequences of the OPEC+ plans for further supply hikes.
Crude Oil prices are trading sideways, within a tight range around $63.50 on Tuesday, consolidating gains after having bounced from two-month lows near $62.00 on Monday. Upside attempts, however, remain limited ahead of the meeting between Trump and Putin later on the week.
Investors are moderately optimistic about the outcome of the encounter, but hopes of a steady peace agreement are dwindling, as the US ultimatum to Russia demanding the end of the o¡hostilities expired today without further consequences.
Putin has demanded the recognition of occupied territories to end the attacks in Ukraine, a possibility that has been outright rejected by the Ukrainian president, Volodymyr Zelensky.
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Two weeks ago, Trump threatened Putin with new sanctions and 10% tariffs on countries buying Russian oil if he continued the war in Ukraine, but the deadline expired last Friday and Russia has only intensified its attacks on its western neighbour without further sanctions from the US.
These developments have offset the negative impact on Crude prices from the larger-than-expected production hike announced by OPEC+ members, which, in the context of a soft global economic outlook, has heightened oversupply concerns.
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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