WTI falls below $74.00 as Trump reiterates call for OPEC+ to reduce Oil prices
- WTI depreciates US President Donald Trump called on OPEC+ to reduce crude Oil prices.
- Trump reiterated his demand for OPEC+ to lower Oil prices to hurt Russia's finances and end the Ukraine war.
- The White House confirmed that Colombia has agreed to all of the terms, following the threat of trump tariffs.
West Texas Intermediate (WTI) Oil price has reversed the gains made in the previous session, trading around $73.90 per barrel during Monday's Asian trading hours. Crude oil prices face pressure as US President Donald Trump sparked trade concerns, urging OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) to reduce crude prices.
On Friday, Trump reiterated his demand for OPEC+ to lower Oil prices in an effort to hurt the finances of Oil-rich Russia and help end the war in Ukraine. “One way to stop it quickly is for OPEC to stop making so much money and drop the price of Oil... That war will stop right away,” Trump stated. However, OPEC and its allies, including Russia, have yet to respond to Trump's call, with OPEC+ delegates pointing to a plan to increase oil output starting in April.
President Trump also warned of imposing taxes, tariffs, and sanctions on Russia "and other participating countries" if a deal to end the Ukraine war is not reached soon. In response, Russian President Vladimir Putin suggested a meeting with Trump to discuss the war and energy prices.
Crude supply concerns also emerged on Sunday when Trump announced plans to impose a 25% tariff on all Colombian goods entering the United States (US), with intentions to increase it to 50% within a week. This move followed Colombia's refusal to allow two US military planes, carrying deported migrants, to land.
In retaliation, Colombia, a key US trading partner and Oil supplier, threatened to impose tariffs on US imports. The US is the largest buyer of Colombia’s seaborne crude exports, purchasing 183,000 barrels per day (bpd) in 2024, or 41% of Colombia’s total exports, according to data from analytics firm Kpler. Additionally, data from the US Energy Information Administration shows the US imported 228,000 bpd of crude and products from Colombia in 2023.
In a surprising twist, the White House announced on Monday that “Colombia has agreed to all of President Donald Trump’s terms, including the unconditional acceptance of all illegal aliens from Colombia who are returned from the United States.”
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.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
