West Texas Intermediate (WTI) futures trading on the Nymex exchange fell 0.4% to nearly $57.00 in late Asian trading on Monday. The price of oil is under pressure after the United States struck Venezuela to arrest President Nicolas Maduro on drug smuggling charges and pledged to restructure the oil industry, a move that could increase global crude oil supplies.
While speaking to reporters at his Mar-a-Lago club on Saturday, US President Donald Trump said he would bring major US oil companies to Venezuela to build its infrastructure and would sell oil to other countries.
According to the London-based Energy Institute, Venezuela’s oil industry accounts for 7% of global reserves, or 303 billion barrels.
Venezuela currently produces less than 1 million barrels per day of crude oil and exports about 0.5 million barrels per day, according to Dow Jones News Agency.
Market experts believe that the impact of the US-led takeover of Venezuela will not lead to an immediate reaction on oil prices, since reform of Venezuela’s oil industry will not happen overnight.
Meanwhile, OPEC decided on Sunday to leave oil production unchanged again, and did not discuss any impact of the US pledge to build oil infrastructure in Venezuela, CNBC reported. In 2025, OPEC+ members raised oil production targets by about 2.9 million barrels per day in the first ten months, and kept production targets steady at the November and December meetings.
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.
