WTI slumps to near $64.00 on oversupply concerns and strong Dollar, Iran tensions limit losses

WTI price tumbles to near $64.00 in Friday’s early European session.
Oversupply concerns and a stronger US Dollar weigh on the WTI price.
Fears of a potential US military attack on Iran might cap the downside for crude oil prices.

Lallalit Srijandorn FXStreet

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $64.00 during the early European trading hours on Friday. The WTI price falls after hitting its highest since late September as oversupply concerns weigh on the price.

Crude oil global production exceeded consumption throughout 2025, leading to significant stockpile builds. This, in turn, weighs on the black gold price. The International Energy Agency (IEA) estimated a substantial surplus will continue through 2026, with an average oversupply of more than 3.7 million barrels per day (bpd) for the year.

Furthermore, a renewed US Dollar (USD) demand could undermine the USD-denominated commodity price. The Greenback rebounds after a report that Trump and Senate Democrats struck a deal to avoid a US government shutdown. The US Senate could vote as soon as Thursday night to approve a government funding package after Democrats reached a deal with Trump to strip out the full-year spending bill for the Department of Homeland Security (DHS).

On the other hand, the potential downside for the WTI might be limited after US President Donald Trump warned Iran to make a nuclear deal or face military strikes. Trump stated on Wednesday that US ships he ordered to the region were ready to fulfill their mission “with speed and violence, if necessary.”

Iran responded with a threat to strike back against the US, Israel, and those who support them. Heightened geopolitical risk in Iran, OPEC’s fourth-largest crude oil producer at 3.2 million bpd, could boost the WTI price in the near term.

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

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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