WTI rises above $65.50 on US trade optimism
- WTI price drifts higher to near $65.75 in Thursday’s early European session.
- US trade talk progress boosts the market sentiment, underpining the WTI price.
- Crude inventories in the United States fell by 3.169 million barrels last week, noted EIA.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $65.75 during the early European trading hours on Thursday. The WTI climbs on optimism surrounding a new US trade deal that would ease pressure on the global economy and a larger-than-expected decline in US crude inventories.
A new US trade deal and prospects of additional agreements could improve the global economic outlook and lift the WTI price. US President Donald Trump on Wednesday announced a “massive” deal with Japan that includes “reciprocal” tariffs of 15% on the country’s exports to the US. This tariff rate is notably lower than the 25% previously threatened by Trump. Additionally, broader risk sentiment also improved amid reports of progress in US-EU trade talks.
About the data, US crude oil inventories fell last week, contributing to the WTI’s upside. The US Energy Information Administration (EIA) weekly crude oil stock report showed crude oil stockpiles in the US for the week ending July 18 declined by 3.169 million barrels, compared to a fall of 3.859 million barrels in the previous week. The market consensus estimated that stocks would decrease by 1.4 million barrels.
Oil traders will closely monitor a meeting between the EU and Chinese President Xi Jinping on Thursday, their first in-person summit since 2023. Furthermore, US Treasury Secretary Scott Bessent stated that he will meet with Chinese officials in Stockholm next week to discuss extending the trade truce. Any signs of renewed tensions could spark fresh concern over global fuel demand and weigh on the black gold.
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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