WTI drifts lower below $61.00 amid uncertainty on Trump trade war
- WTI price edges lower to near $60.80 in Wednesday’s early Asian session.
- OPEC cut its oil demand growth forecast for this year and next year as Trump’s tariffs weigh on global economic growth.
- Crude oil stockpiles in the US rose by 2.4 million barrels last week, according to the API.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $60.80 during the early Asian session on Wednesday. The WTI price remains on the defensive as traders continue to assess the latest headlines on US President Donald Trump's tariff.
The Organization of the Petroleum Exporting Countries (OPEC) lowered its demand forecast on Monday due to the uncertainty caused by the United States' erratic trade policy. The International Energy Agency (IEA) followed on Tuesday with its projection that global oil demand in 2025 will grow at its slowest pace for five years due to concerns about economic growth brought on by Trump's trade tariffs.
Since Trump unveiled his sweeping tariff measures on April 2, the WTI price has dropped more than 14%. The agreement by OPEC+ to increase output beginning in May contributes to the WTI’s downside. The OPEC+ group has agreed to accelerate oil production starting in May even as OPEC sees slightly lower demand for crude and softer economic growth.
The American Petroleum Institute (API) weekly report showed crude oil stockpiles in the US for the week ending April 11 rose by 2.4 million barrels, compared to a decline of 1.057 million barrels in the previous week. The market consensus estimated that stocks would fall by 1.68 million barrels. So far this year, crude oil inventories have climbed more than 24 million barrels, according to the API data.
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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