Seven vessels hit, Iran's IRGC says, warning US of wider response

US bases in the region may face a response if Washington continues urging vessels to pass through a mined waterway, Iran's Islamic Revolutionary Guard Corps (IRGC) navy warned, according to a Reuters report on Thursday.

Four vessels engaged in illegal oil transfers in the northern Persian Gulf were struck simultaneously and caught fire on Wednesday after its forces tracked them, the IRGC added. Separately, the Iranian military said three more vessels had collided with mines west of the Strait of Hormuz.

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

WTI advances

$99.10 is the price of West Texas Intermediate (WTI) at the time of writing. The benchmark is trading 1.54% higher on the day.

WTI Oil: Key Facts

WTI Oil explained

Among the three major crude oil grades traded internationally are West Texas Intermediate (WTI), Brent and Dubai Crude. WTI's relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. Regarded as a high-quality oil, it is easy to refine. Production is based in the United States, with distribution through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, and its price regularly features in media reports.

Key drivers of WTI Oil prices

Supply and demand underpin WTI Oil prices, as they do those of other assets. Stronger global growth can lift demand, while weaker growth can have the reverse effect. Supply disruptions linked to political instability, wars and sanctions can affect prices. Another major influence is policy set by OPEC, a group of leading oil-producing countries. WTI Crude Oil is also sensitive to the US Dollar because oil trading is predominantly denominated in that currency. A weaker US Dollar can therefore make oil more affordable, while a stronger one can have the opposite effect.

Inventory data and WTI Oil prices

WTI Oil prices respond to weekly oil stock reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA). Inventory movements signal shifts in supply and demand. Falling stocks may point to stronger demand and lift oil prices; rising stocks may indicate greater supply and weigh on prices. Every Tuesday, API releases its report, followed by EIA the next day. The figures generally align: 75% of the time, the difference is within 1%. As EIA is a government agency, its data is regarded as more reliable.

OPEC's role in WTI Oil pricing

At meetings held twice a year, the 12 oil-producing nations in OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for their members. These decisions frequently influence WTI Oil prices. Lower quotas can constrain supply and lift oil prices, whereas increased OPEC production has the reverse effect. The broader OPEC+ alliance includes ten additional non-OPEC members, with Russia the most prominent.