West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $57.55 during the early Asian trading hours on Wednesday. The WTI rises as a sign that easing US-China trade friction overrode the effects of gains in the US Dollar (USD) and excess supply concerns. Traders await the US Energy Information Administration (EIA) stockpiles report later on Wednesday.
US President Donald Trump last week threatened a new 100% tariff on China and suggested he would skip a meeting with Chinese President Xi Jinping to be held in South Korea later this month. Trump softened his stance over the weekend, saying that high tariffs on China are unsustainable, and expressed willingness for smoother relations with China.
Trump late Wednesday predicted an upcoming meeting with his Chinese counterpart, Xi Jinping, would yield a “good deal” on trade. However, he also conceded that the highly anticipated talks may not happen.
US Treasury Secretary Scott Bessent is set to meet with his Chinese counterparts to discuss a de-escalation of trade tensions ahead of the Trump-Xi talks. Any signs of easing trade tensions between the US and China, the world’s two largest economies and major consumers of crude oil, could lift the WTI price in the near term.
Data released by the American Petroleum Institute (API) on Tuesday revealed that crude oil stockpiles in the US for the week ending October 17 fell by 2.98 million barrels compared to a rise of 3.524 million barrels in the previous week. Crude oil inventories in the US are so far still showing a net loss for the year, losing 2.423 million barrels according to Oilprice calculations of API data.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have pushed ahead with plans to increase oil supply. This has led analysts to predict a surplus of crude this year and next year. The International Energy Agency (IEA) last week projected a global surplus of nearly 4 million barrels per day in 2026. Concerns over excess supply might cap the upside for the WTI price.
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.
