The price of West Texas Intermediate (WTI) crude oil continues to decline for the second day in a row, reaching around USD 87.50 per barrel on Wednesday during Asian hours. Oil prices are falling amid easing supply concerns as traders expect a second round of peace talks between the United States (US) and Iran before the current two-week ceasefire expires.
The New York Post reported that US President Donald Trump signaled the possibility of resuming negotiations this week, while opposing a 20-year suspension of Iran’s nuclear enrichment program. Meanwhile, Vice President JD Vance highlighted “significant progress” in the first round of talks with Iran held in Pakistan, with further discussions potentially taking place within days.
The United States continues to enforce a naval blockade of Iranian oil exports through the Strait of Hormuz, while Tehran is reportedly considering temporarily halting shipments through the corridor to support progress toward a potential agreement.
Data from the American Petroleum Institute (API) showed that U.S. crude oil inventories increased by 6.1 million barrels in the week ending April 10, compared with an augment of 3.72 million barrels in the previous week. This marks a second straight development pointing to renewed stockpiling amid ongoing geopolitical tensions and changing global supply expectations.
The International Energy Agency (IEA) said in its latest monthly report that global oil supplies are expected to fall by 1.5 million barrels per day this year as attacks on Middle East energy infrastructure and Iran’s effective closing of the Strait of Hormuz disrupt production and exports. According to Reuters, this represents about 1.5% of global demand and contrasts with earlier forecasts of supply growth.
Frequently asked questions about WTI crude oil
WTI Oil is a type of crude oil sold on international markets. WTI stands for West Texas Intermediate, one of three main types, including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” due to its relatively low weight and low sulfur content. It is considered a high-quality oil that can be easily refined. It originates in the United States and is distributed through the Cushing Junction, considered the “Crossroads of the World.” It is a reference point for the crude oil market, and the WTI price is often quoted in the media.
Like all assets, supply and demand are key factors influencing the price of WTI crude oil. Therefore, global growth may drive increased demand and, conversely, feeble global growth. Political instability, wars and sanctions can disrupt supply and affect prices. Another key factor influencing prices are the decisions of OPEC, the group of major oil-producing countries. The value of the US dollar affects the price of WTI crude oil because oil is mainly sold in US dollars, so a weaker US dollar can make oil more affordable and vice versa.
Weekly crude oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Administration (EIA) influence the price of WTI crude oil. Inventory changes reflect fluctuations in supply and demand. If the data shows a decline in inventories, it may indicate increased demand, which will result in an augment in the price of oil. Higher inventories may reflect increased supply, which causes prices to fall. The API report is published every Tuesday and the EIA report the following day. Their results are usually similar and are within 1% of each other 75% of the time. EIA data is considered more reliable because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 oil-producing countries that jointly decide on production quotas for member countries at meetings held twice a year. Their decisions often influence the prices of WTI crude oil. When OPEC decides to cut quotas, it can tighten supply, which will push up oil prices. OPEC increasing production has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, the most notable of which is Russia.
