Key Moments
- West Texas Intermediate (WTI) traded near $75.10 per barrel in Asian hours on Thursday after five straight daily losses.
- A preliminary US-Iran agreement eased supply fears by supporting the reopening of the Strait of Hormuz.
- The IEA expects global oil supply to grow by 8 million bpd by 2027, far above projected demand growth of 2 million bpd.
WTI Stabilizes After Five Days of Losses
West Texas Intermediate (WTI) crude futures edged higher in Asian trading on Thursday and hovered near $75.10 per barrel. Prices steadied after five consecutive losing sessions.
Even so, easing geopolitical tensions have reduced the risk premium that previously supported oil prices. Traders now weigh changing supply expectations against fresh policy signals.
US-Iran Agreement Improves Supply Outlook
WTI could face renewed pressure after reports that the United States and Iran reached a preliminary agreement to end hostilities.
According to the BBC, the White House confirmed late Wednesday that US President Donald Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding. The deal aims to end the US-Israel conflict involving Iran.
Earlier, US Vice President JD Vance and Iranian Parliamentary Speaker Mohammad Bagher Ghalibaf electronically signed the initial framework.
The agreement reportedly creates a 60-day window to negotiate a final peace deal. It also includes plans to reopen the Strait of Hormuz quickly and remove strict sanctions on Iranian oil exports.
However, negotiators still need to resolve nuclear issues and long-term economic incentives. Therefore, some uncertainty around future supply remains.
Fed Maintains Rates but Signals Hawkish Bias
On the monetary policy front, the Federal Open Market Committee kept interest rates unchanged at 3.50% to 3.75%.
At his first meeting as Federal Reserve Chair, Kevin Warsh pledged to take stronger action against inflation and aggressively restore price stability.
Although policymakers held rates steady, they also showed greater support for future rate hikes. As a result, markets reassessed the demand outlook for crude.
Higher borrowing costs could slow economic activity and reduce energy consumption. Consequently, that prospect weighed on oil prices.
IEA Warns of a Large Supply Surplus
The International Energy Agency added another bearish element to the market with its latest monthly report.
As shipping conditions improve, the agency expects global production to outpace consumption by a wide margin. Stronger Gulf exports and rising output from non-OPEC+ producers support that view.
By 2027, the IEA expects global oil supply to increase by 8 million barrels per day. Meanwhile, demand may rise by only 2 million barrels per day.
That leaves a potential surplus of 6 million barrels per day. Therefore, the medium-term outlook for WTI remains challenging.
| IEA 2027 Outlook | Change (bpd) |
|---|---|
| Projected global oil supply | +8 million bpd |
| Projected global oil demand | +2 million bpd |
What Makes WTI Important?
WTI, or West Texas Intermediate, is one of the world’s main crude oil benchmarks. Traders also classify it as “light” and “sweet” because it has low density and low sulfur content.
Producers source WTI in the United States and distribute it through Cushing, Oklahoma, a major energy hub. Because refiners can process it easily, WTI often serves as a global pricing benchmark.
What Drives WTI Prices?
Supply and demand remain the biggest drivers of oil prices. Strong economic growth usually boosts demand, while slower growth often weakens it.
In addition, wars, sanctions, and political instability can disrupt supply and move prices sharply. OPEC decisions also play an important role.
The US Dollar matters as well because oil trades in dollars. A weaker dollar can support demand by making oil cheaper for international buyers.
Why Inventory Data Matters
Weekly inventory reports from the American Petroleum Institute (API) and the Energy Information Administration (EIA) influence oil markets.
Falling inventories often signal stronger demand and can push prices higher. On the other hand, rising inventories usually indicate abundant supply and can pressure prices.
The API releases its report every Tuesday, while the EIA publishes its data on Wednesday. Traders generally place greater weight on EIA figures because they come from a government agency.
How OPEC Influences WTI
OPEC includes 12 major oil-producing countries that coordinate output targets.
When OPEC cuts production, supply tightens and prices often rise. Conversely, higher output can weigh on prices.
OPEC+ expands the group by adding ten other producers, including Russia. Together, these countries exert significant influence over global oil markets.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
