WTI remains stronger around $102.00 despite US pausing Iran strike
- WTI may decline as President Trump paused a planned attack on Iran to allow negotiations.
- Trump warned the US remains ready for a large-scale assault on Iran if ongoing serious negotiations fail to reach a deal.
- India raised petrol and diesel prices by 87 and 91 paise, respectively, to recover losses from high global crude costs.
West Texas Intermediate (WTI) oil price gains ground for the fourth consecutive day, trading around $102.20 per barrel during the Asian hours on Tuesday. However, Crude oil prices may decline amid easing Middle East concerns after reports that United States President Donald Trump said on Monday that he has ordered a pause on a planned US military attack on Iran scheduled for Tuesday. This decision reportedly followed appeals from the leaders of Qatar, Saudi Arabia, and the United Arab Emirates.
In a post on Truth Social, Trump noted that serious negotiations are now taking place, though he warned that the US remains prepared to go forward with a full, large-scale assault of Iran if a deal is not reached.
Prior to this development, oil prices had been rallying for over a week as US-Iran peace talks stalled and shipping through the vital Strait of Hormuz remained effectively closed. Tehran’s nuclear program and the dual blockade of this key waterway continue to serve as major obstacles preventing a breakthrough in negotiations.
Meanwhile, fuel retailers in Delhi announced on Tuesday that India has raised the prices of petrol by 87 paise per litre and diesel by 91 paise a litre as the government moves to recover losses incurred from high global crude prices. As the world's third-largest importer and consumer of oil, India is one of the last major economies to raise retail fuel prices after the U.S.-Israeli war on Iran triggered the effective closure of the Strait of Hormuz.
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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