WTI Oil edges down below $91.00 amid reports of higher flows from the Gulf

WTI Oil retreats below $91.00 on Friday and turns negative on the weekly chart.
Reports that Oil exports from Gulf countries surged in September have eased concerns about supply disruptions.
News that the US is moving additional troops to the Middle East is keeping a floor on Oil's reversal.

Crude Oil prices show a moderate pullback on Friday as news of increased exports from Gulf countries offsets concerns about stalled US-Iran peace negotiations. The US benchmark West Texas Intermediate (WTI) Oil barrel is trading a few cents below $91.00 as of writing, down from Thursday's high at $92.64, and has turned negative in the weekly chart.

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A report by JP Morgan affirmed on Thursday that Oil flows from Middle East countries averaged 17.7 barrels per day in September, about 98% of pre-war levels, while fuel exports averaged 3 million barrels per day, or 58% of pre-war supply.

Beyond that, news that US President Donald Trump has urged France and Germany to release “immediately” diesel stocks or face a ban on US exports has contributed to easing pressure on prices.

Crude’s reversal, however, remains limited, with tensions between the US and Iran on the rise. The Wall Street Journal, citing US officials, reported on Thursday that the Pentagon is sending a third aircraft carrier with approximately 10,000 troops to the region, in a clear signal that hostilities might resume soon.

Meanwhile, the UK Maritime Trade Operations, a Royal Navy organisation monitoring global sea traffic, reported that a tanker was hit by an unknown projectile while crossing the Strait of Hormuz on Thursday, a reminder that the key sea corridor remains far from safe, which keeps Crude prices from falling further.

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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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