WTI holds below $63.00 as traders await possible US-Russia meeting

WTI price tumbles to near $62.75 in Monday’s Asian session.
US and Russian officials were aiming to reach a deal to halt the war in Ukraine.
Concerns over the impact of US tariffs also weigh on the WTI price.

Lallalit Srijandorn FXStreet

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $62.75 during the early Asian trading hours on Monday. The WTI remains under selling pressure after posting the steepest weekly losses since late June in the previous session. Oil traders brace for the American Petroleum Institute (API) Crude Oil stockpiles report, which is due later on Tuesday.

A potential meeting between President Donald Trump and Russian President Vladimir Putin to end sanctions weighs on the WTI price. Trump said that he would meet with Putin on Friday in Alaska to negotiate an end to the war in Ukraine.

Last week, Trump threatened to increase tariffs on India if it kept purchasing Russian oil. Higher US tariffs against many trade partners took effect last Thursday, fueling concerns over weaker global economic activity and sparking bearish sentiment among oil traders. This, in turn, might continue to undermine the black gold.

The Organization of Petroleum Exporting Countries and allies (OPEC+) agreed to boost oil production by 547,000 barrels per day (bpd) for September, the latest in a series of output hikes to regain market share. This might cap the upside for the WTI price.

Nonetheless, oil traders will keep an eye on the US Consumer Price Index (CPI) data for July, which will be published later on Tuesday. The US CPI is expected to show an increase of 2.8% YoY in July, while the core CPI is estimated to show a rise of 3.0% in the same report period. If the inflation data show surprise softer-than-expected outcomes, this could drag the US Dollar (USD) lower and lift demand for USD-denominated crude from foreign buyers.

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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.

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