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WTI declines below $66.50 on US crude stocks build, US tariffs – Crypto News

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  • WTI price remains under selling pressure around $66.45 in Thursday’s early Asian session.
  • Crude oil stockpiles in the US rose by 3.614 million barrels last week, according to the EIA.
  • Fear that Trump’s trade war will slow economic activity and cut crude demand undermines the WTI price. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $66.45 during the early Asian session on Thursday. The WTI price tumbles to its lowest since December 2021 as  US crude oil stockpiles the US rose far more than expected. 

Crude Oil inventories climbed last week. The Energy Information Administration (EIA) weekly report showed crude oil stockpiles in the United States for the week ending February 28 rose by 3.614 million barrels, compared to a fall of 2.332 million barrels in the previous week. The market consensus estimated that stocks would decrease by 290,000 barrels. 

The OPEC+ announcement to maintain their production increase plan from April weighs on the WTI price. OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, decided to increase output for the first time since 2022 

Furthermore, Oil traders are concerned that the tariffs on Canadian, Mexican, and Chinese goods that went into effect yesterday could slow growth, creating headwinds for WTI price. 

Trump confirmed that tariffs on Canada and Mexico would go into effect on Tuesday. The measures Trump had previously reaffirmed the new March date after having initially set it for April. However, Trump is exempting automakers from newly imposed tariffs on Mexico and Canada for one month. 

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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