West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $57.10 during early Asian trading hours on Monday. The price of West Texas Intermediate crude oil rose amid expectations of improved Chinese demand. Traders are bracing for the release of the American Petroleum Institute (API) crude oil inventories report on Tuesday for fresh momentum.
Bloomberg reported on Sunday that the Chinese government indicated a more proactive fiscal stance in 2026, indicating continued government support to drive growth in a difficult external environment.
A Finance Ministry statement said Beijing aims to expand targeted investment in priority sectors, such as advanced manufacturing, technological innovation and human capital development. This announcement came after a working meeting at the end of the year to determine fiscal policy priorities for the coming year. It is worth noting that continued support from the Chinese government to drive growth could boost the price of WTI, as China is the largest importer of crude oil.
On the other hand, US-led talks to end the war in Ukraine have failed to achieve any progress. This, in turn, could push up the price of WTI in the near term. US President Donald Trump announced that he had made “a lot of progress” in talks with Ukrainian President Volodymyr Zelensky on a possible peace deal. However, Trump said there is no clear progress on the hotspot issue, and it may take a few weeks to complete it.
Black gold’s potential upside may be limited amid concerns about a global glut following a supply increase from the Organization of the Petroleum Exporting Countries and its allies (OPEC+). The group agreed to a modest increase in production of 137,000 barrels per day for the month of December.
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.
