WTI falls to near $59.50 due to weakening global economic growth, Oil demand
- WTI price depreciates amid mounting concerns over slowing global economic growth and weakening fuel demand.
- WTI is set for a monthly drop of over 15%, its sharpest since November 2021.
- OPEC+ may fast-track its planned output increases at the upcoming May 5 meeting.
West Texas Intermediate (WTI) Oil price continues its decline for a third consecutive session, trading near $59.50 per barrel during Asian hours on Wednesday. The downward pressure on Oil stems from growing fears over weakening global economic growth and fuel demand, largely triggered by US President Donald Trump’s unpredictable tariff policies.
WTI is on track for a monthly loss exceeding 15%, marking its steepest decline since November 2021. The escalating trade conflict between the world’s two largest Oil consumers—the US and China—has heightened recession fears. Trump's tariffs on imports have prompted retaliatory measures from China, deepening the trade standoff and further dampening economic outlooks, according to a Reuters poll.
Economic sentiment in the United States (US) took another hit on Tuesday as the Conference Board’s Consumer Confidence Index dropped sharply to 86.0 in April from a revised 93.9 in March—its lowest level since April 2020. The decline reflects rising public concern over the impact of tariffs.
On the supply side, US crude inventories rose by 3.8 million barrels last week, according to market sources citing data from the American Petroleum Institute (API). Analysts surveyed by Reuters had forecast a much smaller build of around 400,000 barrels.
Looking ahead, the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, may consider expediting its planned production hikes at their upcoming meeting on May 5. Sources told Reuters that several member nations are likely to push for additional output increases in June, which could add further downward pressure on Oil prices.
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.