WTI drifts lower to near $93.50 as US and Israeli leaders seek to calm Middle East war concerns
- WTI price edges lower to near $93.50 in Friday’s early Asian session.
- US and Israeli leaders try to ease war concerns.
- A prolonged conflict in the Middle East could boost the WTI price.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $93.50 during the early Asian trading hours on Friday. The WTI price declines as the leaders of the US and Israel sought to reassure traders rattled by damage to major Persian Gulf energy facilities.
US President Donald Trump said that he’s “not putting troops anywhere” after being asked about the possibility of deploying US ground forces, while Israeli Prime Minister Benjamin Netanyahu stated that Israel would refrain from more attacks on Iranian energy facilities.
These remarks followed the biggest day of strikes on energy assets since the war began on February 18, including extensive damage to the world’s biggest liquefied natural gas plant in Qatar that will take years to repair.
A significant surge in US crude oil inventories could also weigh on black gold. According to the US Energy Information Administration (EIA) weekly report, crude oil stockpiles in the US for the week ending March 13 climbed by 6.156 million barrels, compared to a rise of 3.824 million barrels in the previous week. The market consensus was for a 400,000-barrel increase.
Traders will closely monitor geopolitical headlines for indications on how long the war will last. Iranian officials stated that the response to Israel’s assault on South Pars “is underway and not yet complete.” Any signs of escalating tensions in the Middle East could raise fear of supply disruption and boost the WTI price in the near term.
(This story was corrected on March 20 at 06:05 GMT to say, in the third paragraph, that these remarks followed the biggest day of strikes on energy assets since the war began on February 28, not February 18.)
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
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
