Towards $87.00: WTI oil falls further amid efforts to restart US-Iran talks

Nearly 3% is wiped off WTI Oil on Monday. Prices reach lows around $87.00, nearing the two-month low of $86.32.
Diplomatic initiatives are gathering pace to restart negotiations between the US and Iran.
Sunday’s attack on an Iraqi gas field and Iran’s accusation that the US struck Qeshm Island keep regional tensions elevated.

Nearly 3% has been lost by US benchmark West Texas Intermediate (WTI) Oil on Monday. At the time of writing, it trades at $87.30, just above the two-month low of $86.32 recorded in early October. Oil has renewed its decline as diplomacy to prevent fresh US-Iran hostilities gathers momentum. Markets view these efforts as a sign that a negotiated resolution to the conflict remains possible.

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

According to Reuters reports, Monday will see US President Donald Trump and Vice President JD Vance meet Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al-Thani. Their discussions will cover the latest diplomatic initiatives aimed at restarting US-Iran negotiations.

Trump Sees Further Iran Strikes as Unlikely While Talks Advance

Tensions eased on Sunday after Trump said a US attack on Iran was highly unlikely while negotiations towards a peace agreement continued to advance. Before leaving for a G7 summit that day, Secretary of State Marco Rubio cautioned that he saw no immediate breakthrough. He nevertheless said President Trump favoured a diplomatic solution, while describing Iran’s demands so far as “unacceptable”.

New directives to end the state of “neither war nor peace” with the US have been issued by Supreme Leader Mojtaba Khamenei, Iranian Prime Minister Masoud Pezeshkian said on Monday. However, Iranian authorities insist that progress towards a peace process requires an end to the US naval blockade and the release of Iran’s seized assets overseas. They also accused the US of failing to honour its commitments.

Regional skirmishes have continued in the meantime. A drone struck the Khor Mor gas field in Iraq’s Kurdish region, while Iranian state media said the US military hit targets on Queshm Island in the Strait of Hormuz on Sunday night.

WTI Oil: Key Questions Answered

WTI Oil: Definition and Characteristics

West Texas Intermediate, abbreviated to WTI, is a crude oil variety traded internationally. Alongside Brent and Dubai Crude, it is one of the three major types. Its relatively low gravity and sulphur content earn it the respective descriptions “light” and “sweet”. This high-quality oil 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.

WTI Oil Prices: Main Drivers

Supply and demand underpin WTI Oil pricing, 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, conflict and sanctions can cause disruptions that affect prices. Decisions by OPEC, the group of major oil-producing nations, are another significant influence. WTI crude is also sensitive to the US Dollar because oil transactions are predominantly denominated in that currency. A weaker US Dollar can therefore make oil more affordable; a stronger dollar can do the opposite.

Weekly Inventories: Their Effect on WTI Oil Prices

WTI Oil prices respond to weekly inventory releases from the American Petroleum Institute (API) and the Energy Information Agency (EIA). Inventory movements capture shifts in supply and demand: a decline can signal stronger demand and lift oil prices, whereas a build can point to greater supply and weigh on prices. The API releases its report each Tuesday, followed by the EIA the next day. The two sets of findings tend to be similar, differing by no more than 1% on 75% of occasions. As the EIA is a government agency, its figures are regarded as more reliable.

12 OPEC Nations: Their Influence on WTI Oil Prices

Production quotas for OPEC’s 12 oil-producing member nations are agreed collectively at meetings held twice a year. The group, formally the Organization of the Petroleum Exporting Countries, often influences WTI Oil prices through these decisions. Lower quotas can restrict supply and lift oil prices; increased production can have the reverse effect. The broader OPEC+ alliance adds ten non-OPEC members, with Russia the most prominent.