- WTI price depreciates following discussions between Trump and Putin to initiate negotiations aimed at ending the Ukraine war.
- The dollar-denominated Oil faces challenges as rising US inflation reinforces odds that the Fed will maintain its hawkish policy stance.
- EIA Crude Oil Stocks Change reported a 4.07 million-barrel increase last week, against an expected 2.8 million-barrel rise.
West Texas Intermediate (WTI) Oil price continues its downward trend for the second straight day, trading around $70.60 per barrel during early European hours on Thursday. The decline comes as market risk sentiment softens following discussions between US President Donald Trump and Russian President Vladimir Putin. The two leaders agreed to initiate negotiations aimed at ending the ongoing war in Ukraine, fueling speculation that a resolution could ease supply concerns from one of the world's largest Oil exporters.
The dollar-denominated crude market also faces pressure from rising US inflation, reinforcing expectations that the Federal Reserve (Fed) will maintain its hawkish policy stance. Higher interest rates for an extended period slow economic activity in the United States, the world's largest Oil consumer, weighing on overall demand.
Additionally, the White House suggested late Wednesday that President Trump might announce his reciprocal tariff plan before meeting Indian Prime Minister Narendra Modi on Thursday, according to CNBC. Trump has recently indicated his intention to impose tariffs on countries that levy import duties on the US, heightening fears of a global trade war and adding to inflationary concerns.
A larger-than-expected buildup in US crude inventories further put downward pressure on Oil prices. Data from the Energy Information Administration (EIA) on Wednesday showed US crude stockpiles increased by 4.07 million barrels for the week ending February 7, surpassing the anticipated 2.8 million-barrel rise.
Meanwhile, OPEC maintained its outlook for strong global oil demand growth in 2025, citing robust air and road travel. The organization, in its latest monthly report, projected world oil demand to increase by 1.45 million barrels per day (bpd) in 2025 and by 1.43 million bpd in 2026, per Business Standard. OPEC does not anticipate that potential trade tariffs will significantly impact economic growth.
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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