WTI stays near $98.00 as US permits trade with Venezuela’s state oil firm
- WTI dipped as the US eased sanctions, allowing limited trade with Venezuela’s state-run oil company.
- Trump granted a 60-day Jones Act waiver to allow foreign ships to transport fuel, easing domestic supply disruptions.
- Iran struck a Qatari LNG facility after an Israeli attack on its South Pars gas field, escalating regional tensions.
West Texas Intermediate (WTI) oil price loses ground after two days of gains, trading around $97.80 per barrel during the Asian hours on Thursday. However, Crude oil prices eased as supply concerns softened after the United States (US) allowed companies to engage in limited business with Venezuela’s state-owned oil and gas firm following a partial easing of sanctions by the Treasury Department.
Additionally, the White House said President Donald Trump would grant a 60-day waiver of Jones Act requirements, allowing goods shipped between US ports to move on non-US-flagged vessels, in a bid to improve domestic fuel distribution.
Further easing supply worries, crude exports from Iraq’s Kirkuk fields to Turkey’s Ceyhan port have resumed via pipeline after Baghdad and the Kurdistan Regional Government reached an agreement to restart flows earlier this week.
However, oil prices could regain traction as geopolitical risk premiums remain elevated. Fresh attacks on key energy infrastructure in the Middle East have heightened fears of disruptions to global oil and gas supplies. Iran launched missile strikes on a Qatari site hosting the world’s largest LNG export facility, marking a significant escalation following an Israeli attack on Iran’s South Pars gas field. US President Donald Trump said he had prior knowledge of the Israeli strike but urged restraint against further attacks on Iranian energy assets.
Meanwhile, Saudi Arabia reported that it had thwarted an attempted attack on one of its gas facilities. Officials said four residents were injured by falling shrapnel in Riyadh, while missiles intercepted in the UAE were reportedly targeting a gas facility and an oil field, underscoring the widening regional risks to energy infrastructure.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. 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 impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.