US early-warning radar in Bahrain targeted and destroyed, Iran's IRGC says

A US military early-warning radar system in Bahrain was struck and destroyed, Iran’s Islamic Revolutionary Guard Corps (IRGC) said on Friday, according to Reuters. The IRGC said its strike was retaliation for an airstrike on a telecommunications tower in the southern Iranian town of Sirik.

Further attacks would lead to an unlimited confrontation, the IRGC warned. Companies working with the US on oil shipments through the Strait of Hormuz would also face tougher penalties, it threatened.

WTI down 0.65%

West Texas Intermediate (WTI) is trading at $87.47 at the time of writing. That represents a 0.65% decline on the day.

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WTI Oil: Key Questions Answered

WTI Oil: Definition and Characteristics

Traded internationally, WTI Oil is a grade of crude oil. Its name stands for West Texas Intermediate, one of three major grades alongside Brent and Dubai Crude. The descriptions “light” and “sweet” refer to its relatively low gravity and sulphur content, respectively. WTI is regarded as a high-quality oil that is straightforward to refine. Produced in the United States, it is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, with its price regularly cited in media coverage.

WTI Oil: Main Price Drivers

Supply and demand underpin WTI Oil prices, as they do for other assets. Stronger global growth can lift demand, while weaker growth can have the reverse effect. Supply disruptions caused by political instability, wars or sanctions can also affect prices. Another major influence is the policy decisions of OPEC, a group of leading oil-producing countries. Because oil is traded mainly in US Dollars, the currency’s value also affects WTI crude prices. A weaker US Dollar can make oil more affordable; a stronger dollar can have the opposite effect.

WTI Oil: The Impact of Inventory Data

Weekly inventory releases from the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence WTI Oil prices by showing shifts in supply and demand. Falling stocks can signal stronger demand and lift oil prices. Rising inventories, by contrast, can point to greater supply and weigh on prices. The API publishes its report every Tuesday, followed by the EIA the next day. The two sets of figures are generally close: 75% of the time, they are within 1% of each other. As the EIA is a government agency, its data is regarded as more reliable.

WTI Oil: OPEC’s Influence on 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 member countries. Those decisions frequently affect WTI Oil prices. Lower quotas can restrict supply and lift prices, while increased production has the reverse effect. The broader OPEC+ grouping adds ten non-OPEC members, with Russia the most notable.