WTI remains subdued around $70.00 amid concerns over global economic growth, fuel demand
- WTI price is on track for its first monthly decline since November, as concerns over fuel demand outweigh supply risks.
- The US will impose a 10% tariff on Canadian energy imports starting March 4.
- Oil prices surged on Thursday after President Trump revoked a license allowing US Oil giant Chevron to operate in Venezuela.
West Texas Intermediate (WTI) crude Oil price edges lower on Friday, trading around $69.90 per barrel during Asian hours, after posting gains in the previous session. Crude Oil prices are on track for their first monthly decline since November, as concerns over global economic growth and fuel demand—amid Washington’s tariff threats and signs of a US economic slowdown—outweighed supply worries.
On Thursday, US President Donald Trump announced that his proposed 25% tariffs on Mexican and Canadian goods, including a 10% levy on Canadian energy imports, will take effect on March 4, alongside an additional 10% duty on Chinese imports.
Adding to investor concerns, the US Gross Domestic Product Annualized (GDP) Annualized slowed to 2.3% in Q4, down from 3.1% in Q3, in line with initial projections. Meanwhile, weekly jobless claims jumped by 22,000 to 242,000, reaching their highest level in over two months and signaling potential softening in the labor market. Investors now turn their focus to Friday’s PCE price index report, the Federal Reserve’s preferred inflation gauge.
However, Oil prices surged more than 2% on Thursday after Trump revoked a license granted to US Oil giant Chevron to operate in Venezuela. Chevron exports approximately 240,000 barrels per day from Venezuela, and the suspension could disrupt over a quarter of the country’s oil output. The move may prompt negotiations for a new agreement between Chevron and Venezuelan state Oil company PDVSA to redirect crude exports to destinations other than the US, sources told Reuters.
Meanwhile, the OPEC+ (Organization of the Petroleum Exporting Countries and its allied members) is weighing whether to proceed with its planned oil output increase in April or maintain current levels. The group faces uncertainty due to fresh US sanctions on Venezuela, Iran, and Russia. OPEC+ typically finalizes supply decisions a month in advance, giving it until March 5-7 to confirm its April production strategy, though no consensus has been reached yet, according to Reuters sources.
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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