WTI holds gains near $61.00 as Iraq reports record Oil exports
- WTI prices have retreated below $61.00 after hitting three-week highs right above $62.00.
- News that Iraq's crude supply hit record levels has added pressure on Oul prices on Monday.
- Hopes of a Trump-Xi trade deal this week are keeping Crude prices from retreating further.
Oil prices are trimming some gains on Monday, as Iraq's oil minister reported a record Crude exports, beyond 102 million barrels in September, and announced negotiations about the size of its quota with OPEC. The US benchmark West Texas Intermediate has hit session lows just below $61.00, but is holding most of the gains taken last week, amid hopes that the Trump-Xi meeting will extend the trade truce between the world’s two major economies, helping avoid a further decline in demand for crude.
The US President endorsed these views earlier on Monday, reiterating before press reporters that he is optimistic about the chances of coming away with a deal after he meets with Chinese President Xi during his tour in Asia.
On Sunday, US Secretary Scott Bessent affirmed that the talks with Chinese negotiators during the Association of Southeast Asian Nations (ASEAN) summit in Malaysia have been fruitful and suggested that Trump’s threat of a 100% tariff on Chinese imports is off the table right now.
Bessent also assured that Beijng is open to delaying the implementation of further restrictions on rare earth imports, which has boosted investor hopes that the trade truce might extend beyond the November 1 deadline, calming fears of a trade war, which would reduce global demand for crude.
Furthermore, the US administration implemented new sanctions against Russia’s leading Oil producers, Lukoil and Rosneft, which are likely to withdraw a significant chunk of global Oil supply from the market, easing concerns of an Oil glut, triggered by continuous supply hikes by producer countries.
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
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
