WTI declines below $58.00 as US considers selling seized Venezuelan crude
- WTI price edges lower to near $57.80 in Tuesday’s early European session.
- Trump said the US might keep or might sell oil seized near Venezuela.
- Ukraine’s attacks on Russian vessels and piers heightened supply disruption fears.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $57.80 during the early European trading hours on Tuesday. The WTI price declines after rising more than 2% in the previous session as US President Donald Trump said that he might sell Venezuelan crude that he has seized.
Reuters reported late Monday that Trump said the United States (US) would maybe keep and maybe sell the oil it had seized off the coast of Venezuela in recent weeks. He further stated that the US would also keep the seized ships. "Maybe we will sell it, maybe we will keep it," Trump said, adding it might also be used to replenish the United States' strategic reserves.
On the other hand, ongoing tensions in the Russia–Ukraine conflict revived concerns over potential supply disruptions and might lift the WTI price. On Monday, Russia intensified its strikes on the southern Ukrainian region of Odesa, causing widespread power cuts and threatening the region's maritime infrastructure. Ukraine’s President Volodymyr Zelensky said the repeated attacks were an attempt by Moscow to block Ukraine's access to maritime logistics.
Traders await the release of the American Petroleum Institute (API) crude oil stockpiles report later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could boost the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might drag the WTI price lower.
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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