West Texas Intermediate (WTI) crude oil prices attracted some buying during the Asian session on Monday, and currently appear to have snapped a two-day losing streak. The commodity is currently trading just above the mid-$57.00 areas, up 0.45% for the day, although the mixed fundamental backdrop calls for caution before positioning for any meaningful recovery from the lowest level since October 21, which was touched last Thursday.
Tensions between the United States and Venezuela escalated further last week after President Donald Trump announced that the US Coast Guard had seized an oil tanker off the coast of Venezuela. This, in turn, raises concerns about potential unrest from Venezuela and acts as a tailwind for crude oil prices. Aside from this, the underlying bearish sentiment surrounding the US Dollar (USD) is seen as another factor offering some support to the commodity.
Despite the US Federal Reserve’s warning about further policy easing, traders are still anticipating the possibility of two more interest rate cuts in 2026. This in turn failed to help the dollar register any meaningful recovery from a two-month low, which in turn acts as a tailwind for US dollar-denominated commodities, including oil prices. However, the upside appears to be stalling amid ongoing concerns about oversupply and a potential peace deal between Russia and Ukraine.
In the latest geopolitical development, Ukrainian President Volodymyr Zelensky held five hours of talks with US envoys on Sunday and offered to abandon his country’s ambition to join the NATO military alliance. Furthermore, US envoy Steve Witkoff said that significant progress had been made, but did not provide additional details. Negotiations are scheduled to continue on Monday, although optimism may continue to weigh on crude oil prices.
Frequently asked questions about West Texas Intermediate crude oil
West Texas Intermediate oil is a type of crude oil that is sold in international markets. WTI stands for WTI, and is one of three main types including Brent and Dubai crude. WTI is also referred to as “light” and “sweet” due to its relatively low gravity and sulfur content, respectively. It is considered a high quality oil and easy to refine. It is sourced from the United States and distributed through the Cushing Hub, considered the “pipeline crossroads of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.
Like all assets, supply and demand are the main drivers of the price of WTI. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and affect prices. Decisions by OPEC, a group of major oil-producing countries, are another major driver of the price. The value of the US dollar affects the price of WTI, as oil is mostly traded in US dollars, so a weak US dollar can make oil more affordable and vice versa.
Weekly oil inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI. Changes in inventories reflect fluctuations in supply and demand. If data shows a decline in inventories, this could indicate increased demand, leading to higher oil prices. High inventories can reflect increased supply, causing prices to fall. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, falling within 1% of each other 75% of the time. EIA data is more reliable, because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 oil-producing countries that collectively decides production quotas for member countries at meetings held twice a year. Their decisions often affect WTI prices. When OPEC decides to cut its quotas, it can tighten supply, causing oil prices to rise. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, most notably Russia.
