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WTI holds losses near $89.50 ahead of potential US-Iran further talks

  • WTI edges lower as easing supply concerns grow ahead of expected US–Iran talks this weekend.
  • Trump said Tehran agreed to abandon nuclear ambitions, provide “free oil,” and reopen the Strait of Hormuz.
  • ING analysts estimate that about 13 million barrels per day of oil supply has been disrupted by the closure.

West Texas Intermediate (WTI) Oil price pares its recent gains from the previous day, trading around $89.60 per barrel during the Asian hours on Friday. Crude oil prices edge lower as easing supply concerns ahead of discussions between Washington and Tehran are anticipated to resume over the weekend.

US President Donald Trump stated that Tehran had agreed to terms including abandoning nuclear ambitions, offering “free oil,” and reopening the Strait of Hormuz, although Iran has not confirmed these claims. Trump also adopted an optimistic stance on the likelihood that both nations could secure a permanent ceasefire before its expiration next week.

Moreover, Trump said on Thursday that he had held conversations with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. He added that Israel and Lebanon have agreed to implement a 10-day ceasefire, set to take effect at 5 PM ET.

However, CNN reported that Lebanon accused Israel of carrying out “several acts of aggression,” noting that intermittent shelling has impacted several villages across southern Lebanon. The army also urged residents to delay returning to towns and villages in the south amid the reported ceasefire breaches.

Meanwhile, the Strait of Hormuz remains effectively closed due to a dual US–Iran blockade, keeping markets on edge over further disruptions to global energy flows. ING analysts estimate that roughly 13 million barrels per day of oil supply has been disrupted by the closure.

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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