- WTI price rises to near $67.00 in Thursday’s early Asian session.
- Rising Middle East tensions boost the WTI price.
- US crude oil inventories declined by 3.644 million barrels in the week ended June 6, according to the EIA.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $67.00 during the Asian trading hours on Thursday. The WTI price climbs to near two-month highs amid heightened geopolitical tensions in the Middle East.
Reuters reported on Wednesday that the United States is planning a partial evacuation of its Iraqi embassy and will allow military dependents to depart places around the Middle East, citing security risks in the region.
Meanwhile, US President Donald Trump said he is losing confidence that the US and Iran can strike a deal over the nuclear program. Trump added that the US would not allow Iran to have a nuclear weapon. Escalating geopolitical tensions could lift the WTI price in the near term.
The Energy Information Administration (EIA) weekly report showed crude oil stockpiles in the US for the week ending June 6 declined by 3.644 million barrels, compared to a fall of 4.304 million barrels in the previous week. The market consensus estimated that stocks would increase by 100,000 barrels.
Trump said that the trade deal with China is ‘done,’ but details and confirmation from China were lacking. Oil traders will closely monitor the developments surrounding US-China trade talks. Economic uncertainty triggered by Trump’s tariff policy could drag the WTI lower.
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.
