WTI Oil nears $87.00 as losses deepen amid efforts to restart US-Iran negotiations

WTI Oil comes under pressure on Monday, falling nearly 3% to lows around $87.00 and moving closer to the two-month low of $86.32.
Diplomatic initiatives to restart negotiations between the US and Iran are gathering pace.
Regional tensions persist following Sunday's attack on an Iraqi gas field and Iran's allegation that the US struck Qeshm Island.

Renewed selling has pushed Oil prices lower on Monday, with markets viewing stepped-up diplomacy to prevent fresh US-Iran hostilities as a sign that a negotiated end to the conflict remains possible. At the time of writing, US benchmark West Texas Intermediate (WTI) Oil is trading at $87.30, down nearly 3% on the day and just above the two-month low of $86.32 recorded in early October.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

According to Reuters reports, discussions on the latest diplomatic initiatives to restart US-Iran negotiations are scheduled for Monday, when US President Donald Trump and Vice President JD Vance will meet Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani.

Does progress in talks make further attacks on Iran unlikely? Trump says so

Tensions eased with Trump's statement on Sunday that a US attack on Iran would be highly unlikely while peace negotiations continue to make progress. Before leaving for a G7 summit that same day, Secretary of State Marco Rubio cautioned that he did not foresee an immediate breakthrough. He nevertheless said President Trump favours a diplomatic solution, while describing Iran's demands so far as “unacceptable”.

New directives from Supreme Leader Mojtaba Khamenei aim to end the state of “neither war nor peace” with the US, Iranian Prime Minister Masoud Pezeshkian said on Monday. However, Iranian authorities insist that progress towards a peace process requires an end to the US naval blockade and the release of Iran's seized assets overseas. They also accused the US of failing to honour its commitments.

Sporadic clashes continue in the region. A drone struck the Khor Mor gas field in Iraq's Kurdish region, while Iranian state media reported that the US military had hit targets on Queshm Island in the Strait of Hormuz on Sunday night.

WTI Oil: Common Questions

What distinguishes WTI Oil?

Among the Crude Oil varieties traded internationally, WTI, or West Texas Intermediate, is one of three major types alongside Brent and Dubai Crude. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. This high-quality Oil is considered easy to refine. Produced in the United States, it is distributed through the Cushing hub, regarded as “The Pipeline Crossroads of the World”. WTI serves as an Oil market benchmark, with its price regularly cited in media coverage.

What determines movements in WTI Oil prices?

Supply and demand underpin WTI Oil prices, as they do for other assets. Stronger global growth can lift demand, whereas weaker growth can have the reverse effect. Supply disruptions arising from political instability, wars or sanctions can also affect prices. Another important influence is OPEC, the grouping of major Oil-producing countries, through its production decisions. Since Oil is traded mainly in US Dollars, the US Dollar's value also matters for WTI Crude Oil prices: a weaker Dollar can make Oil more affordable, while a stronger Dollar can have the opposite effect.

Why do inventory figures affect WTI Oil prices?

WTI Oil prices respond to weekly Oil inventory releases from the American Petroleum Institute (API) and the Energy Information Agency (EIA), as stock changes signal shifts in supply and demand. A drawdown may point to stronger demand and push Oil prices higher. By contrast, a build-up can indicate increased supply and weigh on prices. The API publishes its report every Tuesday, followed by the EIA the next day. The two releases generally show similar results, coming within 1% of each other 75% of the time. As the EIA is a government agency, its figures are regarded as more reliable.

How do OPEC decisions shape WTI Oil prices?

At meetings held twice a year, the 12 Oil-producing nations in OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for members. These decisions frequently affect WTI Oil prices. Lower quotas can restrict supply and lift Oil prices, while an increase in OPEC production can have the reverse effect. The broader OPEC+ grouping brings in ten additional non-OPEC members, with Russia the most notable among them.