WTI holds gains above $68.50 as Trump decides to revoke Chevron’s Venezuela license
- WTI Oil price holds ground amid supply concerns after Trump cancels Chevron's Venezuela license.
- Oil prices faced headwinds amid rising concerns over global economic growth, with fears that Trump tariffs could weaken demand.
- The possibility of a Russia-Ukraine peace deal and the potential easing of Russian sanctions have weighed on Oil prices.
West Texas Intermediate (WTI) Oil price maintains its position above the two-month low of $68.29, recorded on February 26, currently hovering around $68.70 per barrel during European trading hours on Thursday. Crude Oil prices receive some support from supply concerns as US President Donald Trump announced plans to revoke Chevron Corp.’s Oil license in Venezuela, a move criticized by Venezuelan Vice President Delcy Rodriguez as "damaging and inexplicable."
Chevron exports around 240,000 barrels per day (bpd) of crude from its operations in Venezuela, accounting for over a quarter of the country’s total Oil production. With the license revoked, Chevron will no longer be permitted to export Venezuelan crude.
However, crude Oil prices faced headwinds amid rising concerns over global economic growth, with fears that tariffs imposed by US President Donald Trump on China and other trading partners could weaken demand. On Wednesday, President Trump reaffirmed his plan to enforce 25% tariffs on Canada and Mexico and announced intentions to add the EU to the list of nations facing trade penalties for exports to the US.
Oil prices also face pressure from expectations of increased global supply. Hopes for a Russia-Ukraine peace deal have weighed on prices, as the easing of Russian sanctions could boost oil output. In a related development, the US and Ukraine reportedly agreed on a draft minerals deal seen as crucial for securing Washington’s support, with President Trump aiming to swiftly resolve the conflict with Russia.
In Iraq, the Kurdistan regional government has reached an agreement with the federal oil ministry to resume Kurdish crude exports, though the restart awaits Turkey’s approval. The pipeline has been shut since March 2023 following an International Chamber of Commerce (ICC) ruling ordering Turkey to pay Baghdad $1.5 billion in damages for unauthorized exports between 2014 and 2018.
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.
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