Key Moments
- WTI trades near $65.90 per barrel in European markets, marking a second straight day of declines.
- API data show a weekly U.S. crude stockpile increase of 11.4 million barrels, reversing a prior 0.609 million-barrel draw.
- Traders weigh inventory pressure against geopolitical supply risks ahead of U.S.-Iran nuclear talks and potential trade tariffs.
WTI Slides as Inventories Jump
West Texas Intermediate (WTI) crude fell for a second day, trading around $65.90 per barrel in European hours on Wednesday. The decline followed a sharp rise in U.S. crude stockpiles, which renewed concerns about oversupply. Investors also awaited the Energy Information Administration (EIA) report later in the day.
The American Petroleum Institute (API) reported that U.S. crude inventories increased by 11.4 million barrels in the week ending February 20. This reversed a previous weekly draw of 0.609 million barrels and returned the market to surplus conditions.
Geopolitical Risks Keep Supply Concerns Alive
Despite the inventory-driven weakness, oil prices may find support as traders monitor potential supply disruptions linked to U.S.-Iran relations. Nuclear negotiations between Washington and Tehran are in focus this week.
In his State of the Union address, President Donald Trump emphasized openness to diplomacy but warned that Iran was rebuilding nuclear capabilities and developing missiles capable of reaching the U.S. Iran’s deputy foreign minister responded that Tehran would do “whatever it takes” to secure a deal.
The Strait of Hormuz remains a key chokepoint, handling roughly 20% of global oil flows. Any escalation in tensions there could offset some bearish pressure from the U.S. inventory build.
Tariff Moves Cloud Demand Outlook
Traders are reassessing oil demand following new U.S. trade measures. A 10% global tariff took effect on Tuesday, and the administration is considering raising it to 15%.
Market participants evaluate how these tariffs could impact global economic activity and, in turn, future oil consumption.
Key U.S. Crude Market Metrics
| Indicator | Latest Reading | Previous Reading |
|---|---|---|
| WTI price (European hours, Wednesday) | $65.90 per barrel (approx.) | Not specified |
| API U.S. crude stock change (week ended February 20) | +11.4 million barrels | -0.609 million barrels |
WTI Oil FAQs
What is WTI Oil?
West Texas Intermediate (WTI) is a major type of crude oil traded globally. It is light and sweet, meaning it has low density and sulfur content. Traders favor it for its high quality and easy refining. WTI is sourced in the U.S. and distributed via the Cushing hub, often called “The Pipeline Crossroads of the World.” WTI prices serve as a benchmark for the oil market.
What factors drive WTI prices?
Supply and demand remain the main drivers. Strong global growth increases demand, while weak growth reduces it. Political instability, wars, and sanctions can disrupt supply and push prices higher. Decisions by OPEC and OPEC+ influence production quotas and affect pricing. Finally, the U.S. Dollar impacts WTI, as oil trades predominantly in dollars; a weaker dollar generally supports higher prices.
How does inventory data impact WTI?
Weekly reports from the API and EIA show supply and demand changes. Falling inventories indicate higher demand, pushing prices up. Rising inventories signal increased supply, pushing prices down. API reports appear every Tuesday, followed by EIA on Wednesday. EIA data is generally considered more reliable.
How does OPEC influence WTI?
OPEC, a group of 12 oil-producing countries, sets production quotas twice a year. Lower quotas tighten supply and raise prices, while higher quotas increase supply and push prices down. OPEC+ includes ten non-OPEC members, including Russia, to coordinate broader production decisions.
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