- WTI price may decline as supply concerns ease amid optimism over a potential Russia-Ukraine peace deal.
- Trump administration officials are set to meet with their Russian counterparts in Saudi Arabia on Tuesday.
- Global Oil demand has risen to 103.4 million barrels per day, up 1.4 million bpd from the previous year.
West Texas Intermediate (WTI) Oil price rebounds from losses in the previous session, trading around $70.60 per barrel during Monday’s Asian hours. However, crude Oil prices faced headwinds as optimism surrounding a potential peace deal between Russia and Ukraine eased supply concerns. The possible removal of sanctions on Moscow could boost global energy supplies.
According to BBC sources, Trump administration officials are scheduled to meet with their Russian counterparts in Saudi Arabia on Tuesday to discuss a potential peace agreement. This meeting marks a significant step in restoring US-Russia relations, following last week’s breakthrough phone call between President Donald Trump and Russian leader Vladimir Putin.
Meanwhile, delays in United States (US) reciprocal tariffs helped stabilize Oil prices as investors grew more optimistic about potential trade agreements. Last week, Trump directed commerce and economic officials to evaluate reciprocal tariffs on countries that impose duties on US goods, with recommendations due by April 1.
Reuters cited JPMorgan analysts that global Oil demand has surged to 103.4 million barrels per day (bpd), an increase of 1.4 million bpd from the previous year. Analysts also said, “Initially sluggish demand for mobility and heating fuels picked up in the second week of February, suggesting the gap between actual and projected demand will soon narrow.”
Additionally, US Treasury Secretary Scott Bessent told Fox Business on Friday that the US intends to cut Iran’s Oil exports to less than 10% of current levels as President Trump intensifies his “maximum pressure” campaign on Tehran’s nuclear program. “We are committed to reducing Iran’s Oil exports back to the 100,000 barrels per day level seen during Trump’s first term,” Bessent stated.
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.
Read the full article here