$96.00 nears as WTI advances amid uncertainty over US-Iran peace

Nearly 7% lower this week, WTI finds support after easing Middle East supply concerns drove losses.
Despite Israel hinting at a possible attack this week, Trump indicated there were no immediate plans to strike Iran.
Fresh peace proposals came from mediators, while Iran’s security chief deemed Washington’s response so far unsatisfactory.

Around $96.10 per barrel was the level for West Texas Intermediate (WTI) oil in Wednesday’s Asian trading. Prices are advancing for a second consecutive day as investors weigh uncertainty over continuing US-Iran peace talks.

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New proposals aimed at narrowing the differences between the two countries are under review by both sides, according to Qatar’s Foreign Ministry spokesperson. Iran’s national security chief, however, said in a social media post that Washington’s response was still unsatisfactory.

According to the Financial Times, Donald Trump said the US had no immediate plans to attack Iran and appeared to be securing what it wanted. Although the US remained prepared to act if necessary, he suggested there might be no need, even as Israeli Prime Minister Benjamin Netanyahu hinted at an attack later this week.

Earlier this week, surface-to-air missile systems used against American assets were targeted in US defensive strikes on Iran. Their restricted scope, however, points to no immediate resumption of large-scale military operations.

Around 6% remains the week-to-date decline for WTI, the US oil benchmark. Hopes of a diplomatic breakthrough and indications that Middle Eastern crude exports are recovering continue to drive the losses.

WTI Oil: Key Questions Answered

WTI Oil Explained

Traded internationally, WTI Oil takes its name from West Texas Intermediate. Alongside Brent and Dubai Crude, it is one of three major crude oil types. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. This high-quality oil is regarded as 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.

Key Drivers of WTI Oil Prices

Supply and demand underpin WTI Oil pricing, as they do for all 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 cause disruptions that affect prices. Decisions by OPEC, the group of major oil-producing countries, are another important influence. Currency movements also matter: because oil is traded mainly in US Dollars, a weaker US Dollar can make WTI Crude Oil more affordable, while a stronger dollar can do the opposite.

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). These stock changes signal shifts in supply and demand. A drawdown can point to rising demand and lift prices; a build can indicate greater supply and weigh on prices. The API publishes its report each Tuesday, followed by the EIA the next day. The two sets of figures tend to be similar: 75% of the time, they are within 1% of each other. As the EIA is a government agency, its data is viewed as more reliable.

12 OPEC Nations: Their Influence on WTI Oil Prices

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