WTI reverses earlier gains as recovering Middle East exports weigh
- WTI turns lower as a stronger US Dollar and recovering Middle East exports outweigh supply concerns.
- US crude inventories unexpectedly fall by 3.186 million barrels, reversing the previous week’s increase.
- Tanker attacks and stalled US-Iran negotiations keep risks around the Strait of Hormuz elevated.
West Texas Intermediate (WTI) Oil trades lower on Wednesday, giving up earlier gains as a stronger US Dollar (USD) and recovering Middle East exports offset support from an unexpected decline in US crude inventories. At the time of writing, WTI trades around $87.65 per barrel after briefly rising above $90.00 earlier in the day.
Data from the US Energy Information Administration (EIA) showed that crude inventories fell by 3.186 million barrels in the week ending October 2, compared with expectations for a 1.9 million-barrel increase. The latest reading also reversed the previous week’s build of 922,000 barrels.
Supply risks remain elevated in the Middle East, even as regional crude exports show signs of improvement. The recovery has been led by Saudi Arabia following the restart of its East-West pipeline, which allows crude to reach the Red Sea without passing through the Strait of Hormuz.
Reuters reported that maritime security sources recorded at least 12 attacks or other incidents involving tankers between September 28 and October 5. Iran said on Wednesday that the Strait would remain closed until its demands are met and warned that it would soon block what it described as “illegal” shipping routes.
Meanwhile, efforts to end the US-Iran conflict remain deadlocked. US Vice President JD Vance told Reuters that Iran must make a “meaningful” reduction in its nuclear enrichment capacity to end the war. A senior Iranian official said Tehran would not give up its right to enrich uranium and argued that Washington’s proposals remain at odds with Iran’s demands.
Elsewhere, broad US Dollar strength adds pressure on crude prices. The US Dollar Index trades near its highest level since April 2025, supported by elevated Treasury yields. A stronger Greenback makes Dollar-denominated Oil more expensive for buyers using other currencies.
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
Vishal Chaturvedi
FXStreet
I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.
