WTI holds near $69.00, five-week highs, following Trump’s renewed threat to Russia
- WTI price hovers near five-week highs amid rising supply concerns.
- President Trump threatened to tighter deadline for Russia to end the war in Ukraine.
- The Fed is anticipated to leave its benchmark interest rate unchanged in July.
West Texas Intermediate (WTI) Oil price steadies after registering gains in the previous two successive sessions, trading around $68.90 per barrel during the early European hours on Wednesday. Crude Oil prices hover around five-week highs amid rising supply concerns, driven by US President Donald Trump’s threat to tighter deadline for Russia to end the war in Ukraine.
President Trump said on Tuesday that he would impose secondary tariffs of 100% on Russia if it did not make progress on ending the war within 10 to 12 days, moving up from an earlier 50-day deadline. Moreover, the United States warned China, the largest buyer of Russian Oil, it could face huge tariffs if it kept buying, Treasury Secretary Scott Bessent told a news conference in Stockholm, per Reuters.
Bessent also conveyed US concerns over China’s ongoing purchases of sanctioned Iranian Oil and its sale of more than $15 billion in dual-use technology to Russia, which has strengthened Moscow’s war effort in Ukraine.
Additionally, the US-EU trade deal, which has imposed a 15% import tariff on most European Union goods, helped avert a full-scale trade war between the two major allies that would have rippled across nearly a third of global trade and dampened the global Oil demand.
However, the Oil prices could face challenges after the API Weekly Crude Oil Stock showed a surprise 1.539 million-barrel build in US crude inventories, defying expectations of a 2.5 million-barrel decline.
Traders await the US Federal Reserve (Fed) interest rate decision later in the day. The US Fed is widely expected to leave its benchmark interest rate unchanged at 4.25% to 4.50% in July. Markets are now pricing in 97% odds of no change to interest rates at the July meeting, according to the CME FedWatch tool.
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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