WTI rises toward $71.00 but remains on track for a third consecutive weekly decline
- WTI price heads for a third consecutive weekly loss as Trump reaffirms plans to boost domestic Oil production.
- Oil prices depreciated following a sharp rise in US crude and gasoline stockpiles, signaling weaker demand.
- Saudi Aramco raised its prices amid growing demand from China and India, along with disruptions to Russian supply.
West Texas Intermediate (WTI) Oil price pauses its four-day losing streak but remains on track for a third consecutive weekly decline, trading around $70.80 per barrel during early European hours on Friday.
Crude Oil prices faced pressure after US President Donald Trump reaffirmed plans to increase domestic Oil production to push prices lower. His commitment came amid ongoing concerns over an already high supply.
Additionally, Oil prices declined following a sharp rise in US crude and gasoline stockpiles, signaling weaker demand. US crude inventories surged by 8.664 million barrels for the week ending January 31, 2025—the largest increase in nearly a year, far exceeding market expectations of a 2.6 million-barrel increase.
US-China trade tensions also weighed on the market, as Beijing imposed tariffs on US Oil, LNG, and coal in retaliation for Trump’s recent measures. However, the impact is expected to be limited due to China’s relatively small imports of US energy products. Despite this, hopes for easing trade tensions persist as President Trump and Chinese President Xi Jinping plan to discuss potential tariff rollbacks, according to Reuters.
Providing some support to prices, Saudi Aramco’s price hike was fueled by growing demand from China and India, coupled with disruptions to Russian supply resulting from US sanctions. Further supply risks remain as US President Donald Trump’s renewed efforts to eliminate Iran’s oil exports could potentially remove up to 1.5 million barrels per day from the market.
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
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.
