West Texas Intermediate (WTI) oil price rises over 7% after two days of losses, trading around $101.10 per barrel during the European hours on Thursday. Crude oil prices move higher as supply concerns intensify after United States (US) President Donald Trump’s remarks on the Middle East conflict failed to convince markets of a swift resolution to the war with Iran.
President Trump stated that Iran is no longer a significant threat but warned that military strikes could intensify over the coming weeks. His comments heightened fears of broader damage to energy infrastructure across the Gulf region. He also noted that the US does not depend on the Strait of Hormuz and suggested it would reopen naturally once the conflict concludes.
Meanwhile, Iran pushed back against Trump’s assertion that it had sought a ceasefire, maintaining that the Strait of Hormuz will remain closed and emphasizing that the critical waterway remains under the control of the IRGC Navy.
Oil prices rise as risks to maritime traffic have increased after an oil tanker leased to QatarEnergy was struck by an Iranian cruise missile in Qatari waters on Wednesday, Reuters cited the country’s defense ministry.
Additionally, the head of the International Energy Agency (IEA) warned that supply disruptions are expected to begin impacting Europe’s economy in April, noting that the region had previously been cushioned by cargoes secured prior to the outbreak of the conflict.
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.
Source: https://www.fxstreet.com/news/wti-rises-above-10100-as-trumps-iran-stance-fuels-supply-fears-202604020836
