WTI climbs to three-week high as EIA draw and geopolitical risks lift Oil prices
- WTI extends gains for a second day, supported by a surprise draw in US crude stocks.
- EIA data showed inventories fell by 0.607M barrels, defying forecasts for a modest rise of 0.5M barrels.
- US President Donald Trump warns Europe at the UN General Assembly to halt Russian energy imports.
West Texas Intermediate (WTI) Crude Oil extends its rebound for the second straight day on Wednesday, recovering from its weakest level in nearly two weeks, hit earlier on Monday.
At the time of writing, WTI is trading around $64.55 per barrel, its highest level since September 3, up over 1.50% on the day. The bounce reflects a combination of bullish inventory signals and rising geopolitical tensions that have re-injected risk premiums into energy markets.
The latest US Energy Information Administration (EIA) data showed Crude Oil inventories declining by 0.607 million barrels for the week ending September 19, compared with forecasts for a 0.5 million build. The draw, though modest compared with the sharp 9.3 million barrel decline reported a week earlier, still pointed to steady refinery runs and resilient demand.
Commercial stocks fell by 0.6 million while the Strategic Petroleum Reserve edged higher, leaving total crude holdings at 820.7 million barrels. Refinery runs held steady at 16.48 million barrels per day, while higher imports and softer exports limited the draw.
Oil sentiment was further bolstered by renewed geopolitical risks. Iran stated that it would continue selling Oil to China, even if United Nations sanctions were reimposed. According to Reuters, citing data from analytics firm Kpler, China accounted for nearly 80% of Iran’s exports last year, and any renewed sanctions regime would risk disrupting such flows.
Meanwhile, US President Donald Trump escalated rhetoric against Russia during his speech at the United Nations General Assembly in New York on Tuesday. He warned European nations to immediately halt purchases of Russian oil and gas or face new US tariffs, calling continued imports from Moscow “inexcusable.” The threat underscored Washington’s determination to curb Russia’s energy revenues, raising questions about how Europe would balance compliance with its own supply security.
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
Vishal Chaturvedi
FXStreet
I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.
