WTI rises above $98.50 amid Middle East supply fears

WTI gains as Saudi Arabia's East-West pipeline remains shut indefinitely following recent drone attacks, fueling supply anxiety.
Iran reported a supertanker explosion near Hormuz and refused U.S. talks amid regional diplomatic gridlock.
Ukrainian President Zelenskyy conditioned halting energy strikes on Russian reciprocity, contradicting claims of a prior suspension agreement.

Akhtar Faruqui FXStreet

West Texas Intermediate (WTI) oil price extends its gains for the second successive day, trading around $98.60 per barrel during the Asian hours on Tuesday. Crude oil prices appreciate as traders continue to navigate heightened uncertainty over global supply.

Saudi Arabia’s East-West pipeline, which provides an alternative route to the Strait of Hormuz, remains shut following drone attacks, with no clear indication of when operations will resume.

A diplomatic meeting between Iran and the Gulf Arab states to discuss the situation in Hormuz was also abruptly postponed. Meanwhile, Iran claimed that a supertanker attempting to enter a restricted area in Hormuz exploded after striking mines, while maintaining that it would not engage in talks with the US until its demands are met.

In Eastern Europe, President Volodymyr Zelenskyy said Ukraine is prepared to halt attacks on Russian energy targets if Russia does the same, contradicting US President Donald Trump’s claim that Moscow and Kyiv had already agreed to suspend strikes against each other’s energy infrastructure.

Trend followers stay fully loaded in oil complex

According to TD Securities, trend-following commodity trading advisors remain heavily committed to the energy complex, with the bank noting that "CTAs remain max long across crude oil, diesel and gasoline markets, with only vol levels constraining positioning at this point." This underscores how systematic length in oil products is now being limited less by conviction and more by volatility considerations.

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.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

Japanese Yen stays resilient after BoJ maintains status quo

The Japanese Yen stays resilient against its major rivals on Friday, with USD/JPY trading in negative territory below 157.50. The Bank of Japan (BoJ) decided to leave monetary policy settings unchanged at the October meeting, as expected. In the post-meeting press conference, BoJ Governor Ueda reiterated that they will continue to raise the policy rate and adjust the degree of monetary easing in reponse to economic activity and prices.

Gold bears retain control below $4,000 as hawkish Fed bets back further losses

Gold extends its intraday breakdown momentum below the $4,000 psychological mark through the early European session on Friday, eyeing the monthly swing low amid hawkish US Federal Reserve expectations. US macro data on Thursday pointed to resilient economic growth and persistent price pressures, solidifying bets of an imminent Fed rate hike in December. This is seen as undermining the non-yielding bullion for the second straight day and backing the case for further depreciation.

The hawkish Fed can't lift the US Dollar anymore

About three more Federal Reserve hikes are already priced in, and the central banks behind the Euro, Pound, Yen and Loonie are raising rates or about to. That leaves the US Dollar Index with little to gain if the Fed keeps leaning toward higher rates.

Binance hack shakes crypto, but XRP pullback may not be so bearish

Crypto markets were hit by a big headline overnight. Binance confirmed a security incident in which a compromised engineer's laptop led to unauthorized withdrawals, with an estimated impact of around $6.3 billion. About $3 billion has been frozen so far, Binance says it will cover the losses, and withdrawals were paused while security checks are completed.

A hot US economy is supposed to sink Gold. It didn't. Here's why

Gold (XAU/USD) remains under pressure near $4,000, as stronger-than-expected United States (US) economic data reinforce expectations of another Federal Reserve (Fed) interest rate hike in December. Economic growth is accelerating, inflation remains elevated, and borrowing costs could rise further.