WTI seems vulnerable near $61.75, one-week low amid US-Iran de-escalation
- WTI attracts sellers for the second straight day on Tuesday and hangs near a one-week low.
- Hopes for US-Iran nuclear talks ease supply disruption concerns and weigh on Oil prices.
- A surge in Venezuelan oil exports and the recent USD bounce back the case for further slide.
West Texas Intermediate (WTI) US Crude Oil prices struggle to capitalize on the previous day's modest bounce from the $61.20 area, or a one-week trough, and attract some sellers for the second straight day on Tuesday. The commodity currently trades around the $61.75 region, down 0.40% for the day, and seems vulnerable to slide further.
Signs of de-escalation of tensions between the US and Iran, over the latter's nuclear programme, ease market concerns about a military confrontation and supply disruption fears. In fact, officials from both countries told Reuters that Iran and the US will resume nuclear talks on Friday. This, in turn, led to a bearish gap opening on Monday and continues to exert some downward pressure on Crude Oil prices.
Meanwhile, forecasts of milder weather in the US turn out to be another bearish development for the black liquid amid the recent US Dollar (USD) recovery from a four-year low. US President Donald Trump’s nomination of Kevin Warsh as the next Federal Reserve (Fed) chair tempered hopes for more aggressive rate cuts and provided a goodish lift to the buck, which undermines the USD-denominated commodity.
Moreover, a surge in Venezuelan oil exports to approximately 800K barrels per day in January, from 498K barrels per day in the previous month, adds to worries about a major supply glut. This, in turn, validates the near-term negative outlook for Crude Oil prices and backs the case for a further retracement slide from its highest level since August 2025, around the $66.25 area, touched last week.
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
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
