WTI hovers around $62.50 after pulling back from four-month highs
- WTI reached a four-month high of $62.85 on Wednesday, supported by persistent supply risks.
- A severe winter storm cut US crude output by up to 2 million bpd, about 15% of total production.
- API data showed US Weekly Crude Oil Stock fell 0.25 million barrels after a 3.04 million-barrel build.
West Texas Intermediate (WTI) Oil price depreciates after registering 2.86% gains in the previous session, trading around $62.40 per barrel during the European hours on Wednesday. WTI price hit a four-month high of $62.85 at earlier hours, driven by supply risks persisting.
US crude output declined by as much as 2 million barrels per day, around 15% of total production, and temporarily disrupted Gulf Coast exports as energy infrastructure and power grids were strained. Icy, wet conditions across parts of the South are likely to delay restarts, per Reuters.
Traders are closely monitoring the US military buildup in the Middle East amid rising risks of potential action against Iran. A US aircraft carrier and accompanying warships have arrived in the region, two US officials told Reuters on Monday, expanding President Donald Trump’s ability to defend US forces or potentially carry out military action against Iran.
The American Petroleum Institute (API) reported that US Weekly Crude Oil Stock fell by 0.25 million barrels in the week ended January 23, following a 3.04 million-barrel build the previous week.
Meanwhile, the US dollar (USD) slid to its lowest level in nearly four years, enhancing the appeal of dollar-denominated Oil for buyers. Meanwhile, US President Donald Trump said the USD’s value is “great” when asked if it had fallen too much.
Traders await the US Federal Reserve (Fed) policy decision later in the day, expecting the central bank to keep rates unchanged at 3.50%–3.75% at the end of its two-day meeting on Wednesday, following three consecutive rate cuts in 2025. Markets will focus on the post-meeting press conference for guidance on the policy outlook in the months ahead.
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.