Near $102.00: West Texas Intermediate trades lower after retreating from five-month highs

104.00 marked WTI's five-month high on Friday. Prices subsequently retreated.
Reports that the US has approached Iran directly to revive peace talks have eased concerns over oil supplies.
Oil prices retain underlying support from threats that US airstrikes could restart after the forthcoming midterm elections.

$102.20 per barrel was the approximate price of West Texas Intermediate (WTI) oil in early European trading on Friday. Prices surrendered part of their daily gains after touching a five-month high of 104.00 earlier in the session. Fresh diplomatic initiatives in the Middle East have helped relieve pressure on global energy markets.

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

In a bid to revive peace talks, US Vice President JD Vance contacted Mohsen Rezaei, Secretary of Iran's Supreme National Security Council, the Wall Street Journal reported. Confirming that he had authorised Vance's approach, US President Donald Trump said Iran needed help with medical supplies and other essential resources.

The prospect of renewed US military strikes against Iran could nevertheless support oil prices. After a senior commander recently briefed President Trump on possible military options, Trump has continued to warn that airstrikes on Tehran could restart following the forthcoming midterm elections.

Nearly 14% has been added to the US oil benchmark in October despite the latest diplomatic activity. The US-Iran conflict continues, while fighting involving Saudi Arabia and Iran-backed Houthi forces has intensified. Tankers still face attacks and threats to shipping through the Strait of Hormuz remain elevated. Even so, regional crude exports have recovered to close to prewar levels, with producers discreetly moving oil cargoes through the strategic waterway.

Deal headlines weigh on crude sentiment, TD Securities says

TD Securities attributes continued pressure on the crude complex to the flow of news about potential agreements, noting that "persistent headlines of deal talks are weighing on the crude oil market,". These reports are curbing bullish momentum, although underlying fundamentals remain in focus.

WTI Oil: Key Questions

WTI Oil explained

Traded internationally, WTI Oil takes its name from West Texas Intermediate. It is one of three major crude varieties, alongside Brent and Dubai Crude. Its relatively low gravity earns it the description “light”, while its low sulphur content makes it “sweet”. This high-quality oil is easy 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.

Key drivers of WTI Oil prices

Supply and demand determine WTI Oil prices, as they do for other assets. Stronger global growth can lift demand, while weaker growth can reduce it. Supply disruptions caused by political instability, war or sanctions can also affect prices. Another major influence is OPEC, the group of leading oil-producing countries whose decisions shape supply. Currency movements matter too: because oil is traded mainly in US Dollars, a weaker US Dollar can make WTI Crude Oil more affordable, while a stronger currency can have the reverse effect.

Inventory data and WTI Oil prices

WTI Oil prices respond to weekly inventory releases from the American Petroleum Institute (API) and the Energy Information Agency (EIA). Stock changes capture shifts in supply and demand. Falling inventories may signal stronger demand and lift oil prices; rising stocks may indicate greater supply and weigh on prices. The API publishes its report each Tuesday, followed by the EIA the next day. The two releases generally show similar results: 75% of the time, their figures are within 1% of each other. As a government agency, the EIA is regarded as the more reliable source.

12 producers: 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 member countries. These decisions frequently influence WTI Oil prices. Lower quotas can restrict supply and raise oil prices, whereas increased output has the reverse effect. The broader OPEC+ grouping adds ten non-OPEC members, most notably Russia.