WTI trades near $66.50 after pulling back from six-month highs
- WTI retreated after hitting $66.82, a six-month high, amid rising US-Iran supply tensions.
- President Trump warned Iran to strike a deal or face military consequences, pressuring fragile nuclear talks.
- EIA Crude Oil Stocks fell 9.014M barrels, versus forecasts for a 2.1M-barrel build.
West Texas Intermediate (WTI) Oil price eases after two consecutive sessions of gains, trading near $66.40 per barrel during Asian hours on Friday. The benchmark WTI retreated after touching a six-month high of $66.82 earlier in the day, supported by escalating supply concerns linked to tensions between the United States (US) and Iran.
According to the BBC, US President Donald Trump warned that Iran must reach an agreement or face “bad things,” keeping the threat of military action over fragile nuclear negotiations. Iran, in turn, informed UN Secretary-General Antonio Guterres that it does not seek conflict but will respond to any military aggression.
Crude Oil prices could regain traction as reports indicate US officials are considering a potential military operation in the Middle East, while Israel continues to advocate for regime change in Tehran. The head of the UN nuclear watchdog cautioned that Iran’s window for a diplomatic resolution is narrowing amid a US military buildup. Any escalation risks disrupting flows through the Strait of Hormuz, a critical chokepoint that handles roughly 20% of global Oil shipments.
A Reuters report suggests that the geopolitical premium embedded in crude prices due to US-Iran tensions remains fluid, though markets broadly assume the situation will ultimately stabilize. Estimates place the current risk premium at around $7–$10 per barrel, reflecting concerns that negotiations could collapse, while still implying limited expectations of major supply disruptions through the Strait of Hormuz.
Meanwhile, fresh data from the US Energy Information Administration (EIA) showed US Crude Oil Stocks dropped by 9.014M barrels in the last week, sharply contrasting with market forecasts for a 2.1M-barrel build that would have offset the prior week’s 8.53M increase.
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.
