WTI hovers below $59.00 as US-Iran tensions ease, weekly loss looms

WTI price is set for a modest weekly loss following three consecutive weeks of gains.
Crude Oil prices decline as easing fears of a potential US military strike on Iran reduce geopolitical risk premiums.
The US seized another Venezuela-linked Oil tanker ahead of a Trump–Machado meeting in the Caribbean.

Akhtar Faruqui FXStreet

West Texas Intermediate (WTI) Oil price moves little after two days of more than 3% losses, trading around $58.80 during the Asian hours on Friday. WTI price faces challenges as geopolitical risk premiums faded following easing fears of a possible US military strike on Iran. Crude Oil prices are heading for a modest weekly decline after three straight weeks of gains.

US President Donald Trump said he had stepped back from threats of military action after receiving assurances that further killings would not occur and executions would be halted. Market sentiment was also supported by reports that Israel and other regional allies urged Washington to delay any action, amid concerns over potential retaliation.

These developments lowered fears of an imminent conflict that could disrupt Iranian Oil output or key regional shipping lanes. However, analysts cautioned that risks have not disappeared, keeping markets alert in the near term. Analysts also maintained a bearish outlook, citing expectations of ample supply this year despite earlier OPEC projections for a more balanced market.

Oil major Shell on Thursday released its 2026 Energy Security Scenarios report, outlining a bullish outlook for long-term energy demand and Oil growth, with primary energy needs projected to be significantly higher by 2050, per Reuters.

According to another report by Reuters, the United States seized another Venezuela-linked Oil tanker in the Caribbean ahead of a scheduled meeting between President Donald Trump and opposition leader María Corina Machado. This marks the sixth vessel targeted under US sanctions on Venezuelan Oil, underscoring ongoing enforcement efforts against sanctioned shipments.

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

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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