- WTI price declines Sunday’s discussions between Ukrainian and US officials could increase Russian Oil supply.
- Ukrainian Defense Minister Rustem Umerov emphasizes efforts to safeguard energy and critical infrastructure.
- Iraq aims to boost Oil production capacity beyond 6 million barrels per day (bpd) by 2029.
West Texas Intermediate (WTI) Oil price continues to decline for the second consecutive session, trading around $68.00 per barrel during Asian hours on Monday. The drop comes as geopolitical tensions ease following discussions between Ukrainian and US officials in Riyadh on Sunday, which may lead to an increase in Russian Oil supply to global markets, according to Reuters.
Efforts to negotiate a ceasefire are ongoing, with President Trump advocating for an end to the three-year war. Ukrainian Defense Minister Rustem Umerov highlighted measures to protect energy and critical infrastructure. Meanwhile, a US delegation is set to meet with Russian officials on Monday to push for a Black Sea ceasefire and broader de-escalation in Ukraine.
Reuters quoted Toshitaka Tazawa, an analyst at Fujitomi Securities, who noted, "Expectations of progress in peace negotiations between Russia and Ukraine and a potential easing of US sanctions on Russian Oil pressured prices lower." He added that investors remain cautious, assessing future OPEC+ production trends beyond April.
In the Middle East, Iraq is planning to expand its Oil production capacity beyond 6 million barrels per day (bpd) by 2029, according to the state news agency. Iraq's Oil ministry undersecretary, Bassem Mohamed Khodeir, stated that the country aims to achieve this goal through Oil exploration and extensive drilling efforts, citing a recent agreement with BP to redevelop four Kirkuk Oil and gas fields.
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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