Above $100.00: WTI climbs amid Israeli election impasse and attack on Saudi infrastructure

WTI gains as Israel's election leaves Netanyahu and Eisenkot locked in a close contest.
Meetings involving Saudi, Pakistani, Turkish and Iranian leaders accelerated regional diplomacy.
Supply concerns intensified after Houthi missile attacks targeted Saudi Arabia's largest oil refinery.

WTI trades near $100.30 per barrel during Wednesday's Asian session. West Texas Intermediate (WTI) is recovering after two days of declines. Crude prices moved higher as global markets tracked Israeli election results that could reshape the course of the ongoing Middle East conflict.

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

With vote counting still under way, exit polls put Prime Minister Benjamin Netanyahu level with opposition leader Gadi Eisenkot, leaving neither bloc with a majority. The stalemate nevertheless signals diminishing support for Netanyahu. A central figure in Israeli politics for decades, he has led the country through nearly three years of uninterrupted conflict.

Regional diplomacy also drew market attention after Iranian leaders met officials from Saudi Arabia, Pakistan and Turkey on Monday. Iran’s Supreme Leader Mojtaba Khamenei added to that momentum by urging an end to the prevailing state of "neither war nor peace."

Escalating attacks by Yemen's Iran-aligned Houthis, however, leave the wider prospects for peace highly uncertain. Renewing their attacks on major oil producer Saudi Arabia, the group said on Tuesday that a ballistic missile had hit Ras Tanura, the kingdom's largest oil refinery.

Brent risk premium stays high amid Iran brinkmanship

Commerzbank analysts describe a highly charged geopolitical environment for Brent. US President Donald Trump recently threatened Iran, saying he would shortly choose between reaching a deal and deciding to “finish it off.” Warning that “new US attacks on Iran could take place following the US mid-term elections next week,” the bank also highlights today’s parliamentary elections in Israel as potentially decisive for the conflict's direction. If Israeli Prime Minister Benjamin Netanyahu returns to office, he “might attempt to achieve regime change in Iran,” Commerzbank cautions. Such a scenario would reinforce the risk premium already built into oil prices.

WTI Oil: Key Questions

What defines WTI oil?

Among the three major crude oil grades traded internationally, WTI stands alongside Brent and Dubai Crude. Its full name is West Texas Intermediate. The descriptions “light” and “sweet” refer to its relatively low gravity and sulphur content, respectively. This high-quality crude is considered 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 by the media.

What determines 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 have the reverse effect. On the supply side, political instability, wars and sanctions can disrupt deliveries and affect prices. Decisions by OPEC, the group of major oil-producing countries, are another important price driver. The US Dollar also matters because oil is traded mainly in that currency. A weaker US Dollar can therefore make oil more affordable, while a stronger currency can have the opposite effect.

How do inventory reports affect WTI oil prices?

WTI oil prices respond to the weekly inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA). Inventory movements reflect shifts in supply and demand. Falling stocks can signal stronger demand and lift oil prices; rising stocks can indicate greater supply and put prices under pressure. The API releases its report each Tuesday, followed by the EIA the next day. The two reports generally produce similar results: 75% of the time, their figures are within 1% of each other. As the EIA is a government agency, its data is regarded as more reliable.

How do OPEC decisions affect WTI oil prices?

At meetings held twice a year, the 12 oil-producing members of OPEC (Organization of the Petroleum Exporting Countries) jointly set their production quotas. These decisions frequently affect WTI oil prices. Lower quotas can restrict supply and drive prices higher, while increased OPEC production has the reverse effect. The broader OPEC+ grouping brings in ten additional non-OPEC members, with Russia the most notable.