Key Moments
- WTI rebounds during the Asian session, recovering much of the prior day’s drop from its lowest level since April 21 and trading back above $91.00.
- Fresh US strikes on an Iranian military site and a retaliatory move by Iran’s IRGC keep the geopolitical risk premium elevated in crude markets.
- A stronger US Dollar and upcoming US PCE and preliminary Q1 GDP data are seen as potential constraints on further WTI gains.
Geopolitical Tensions Propel WTI Recovery
West Texas Intermediate (WTI), the benchmark US crude oil price, strengthened during the Asian session on Thursday, reversing a significant portion of the previous day’s losses that had driven prices to their lowest level since April 21. The contract reached a fresh intraday high in the latest trading and was attempting to extend its advance beyond the $91.00 level, supported by mounting concerns over a further escalation in the Middle East.
According to Reuters, the latest catalyst came from new US strikes overnight on an Iranian military facility that officials said posed a threat to US forces and commercial shipping in the Strait of Hormuz. In a separate development, Tasnim news agency reported that Iran’s Islamic Revolutionary Guard Corps (IRGC) stated it had targeted a US airbase in response to an attack near Bandar Abbas airport, adding that any additional US actions would prompt “a more decisive” reaction. These developments sustained the geopolitical risk premium and encouraged renewed buying interest in crude.
Limited Shipping Flows and Falling US Stockpiles Support Prices
At the same time, comments from US President Donald Trump added to the tension. He said he was not satisfied with the terms of the deal negotiated with Iran and that he would not be rushed into an agreement, dampening expectations for a diplomatic resolution to a three-month-old conflict.
Crude fundamentals were also underpinned by ongoing disruption in key maritime routes. Shipping activity through the Strait of Hormuz remained constrained by Iran’s restrictions on vessel movements and a US naval blockade of Iranian ports. Additionally, data from the American Petroleum Institute indicated that US crude inventories declined for a sixth consecutive week, providing further support to oil prices.
| Support Factor | Details |
|---|---|
| Geopolitical developments | Fresh US strikes on an Iranian military site and IRGC targeting of a US airbase |
| Diplomatic outlook | US President Donald Trump said he is not satisfied with the Iran deal terms and will not be rushed into a deal |
| Supply and logistics | Restricted shipping through the Strait of Hormuz and a US naval blockade of Iranian ports |
| Inventory trend | API data showed US stockpiles fell for the sixth straight week |
USD Strength and US Data Seen as Near-Term Headwinds
The overall backdrop continued to favor bullish positioning in WTI and reinforced the constructive near-term outlook for crude. However, a pronounced increase in demand for the US Dollar, which typically weighs on USD-denominated commodities, was viewed as a possible brake on additional upside in oil.
Market participants were turning their attention to upcoming US macroeconomic releases, including the Personal Consumption Expenditures (PCE) Price Index and the preliminary US Q1 GDP report, for further direction later in the North American session.
WTI Oil: Key Market Characteristics
WTI oil is a grade of crude traded globally. The term WTI stands for West Texas Intermediate and is one of three primary benchmarks alongside Brent and Dubai crude. It is commonly described as “light” and “sweet” because of its relatively low gravity and sulfur content. WTI is regarded as a high-quality crude that is relatively easy to refine. It is produced in the United States and shipped through the Cushing hub, often called “The Pipeline Crossroads of the World.” WTI serves as a major reference price in the oil market, and its price is widely cited in financial media.
Primary Drivers of WTI Pricing
As with other assets, WTI prices are primarily influenced by supply and demand dynamics. Strong global growth can bolster demand, while weaker growth can reduce it. Political instability, armed conflicts, and sanctions can interrupt supply and influence price levels. Decisions by OPEC, a coalition of leading oil-producing countries, are another key factor, as the group sets production targets that can tighten or loosen supply. The value of the US Dollar is also important, since crude is largely traded in USD; a weaker Dollar can make oil relatively cheaper, and a stronger Dollar can have the opposite effect.
Impact of Inventory Data on WTI
Weekly oil inventory data from the American Petroleum Institute (API) and the US Energy Information Agency (EIA) can significantly affect WTI prices. Inventory changes reflect shifts in supply-demand balance. A drawdown in stockpiles can signal rising demand or constrained supply, supporting higher prices, while an increase in inventories can point to oversupply, putting pressure on prices. The API typically releases its data every Tuesday, with the EIA publishing its report the following day. The two datasets usually track closely, with results within 1% of each other 75% of the time. EIA figures are generally considered more reliable because the agency is part of the US government.
Role of OPEC and OPEC+ in WTI Markets
OPEC (Organization of the Petroleum Exporting Countries) is comprised of 12 oil-producing nations that collectively set production quotas at twice-yearly meetings. These decisions often influence WTI pricing. When OPEC lowers production targets, it can reduce supply and support higher prices; when the group raises output, it can increase supply and weigh on prices. OPEC+ refers to an expanded framework that includes ten additional non-OPEC producers, with Russia being the most prominent among them.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
