Indirect talks with US continue through intermediary countries, says Iran’s Araghchi

Providing an update on diplomatic engagement, Iran's Foreign Minister Abbas Araghchi said indirect talks with the United States (US) remain under way through intermediary nations, including Pakistan and Qatar, according to a Reuters report on Tuesday.

Under the arrangement, the Strait of Hormuz was due to reopen fully on the sixth day of this period, Araghchi added. Although Washington accepted Iran's seven-day proposal, it sought to attach several further conditions, the details of which he declined to reveal. Araghchi also demonstrated that the US is not to be trusted during negotiations.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

In a development marking a sharp escalation in the continuing regional conflict, Yemen’s Houthi rebels said a ground attack on Saudi Arabia remains an option, according to Iran's Sepah News.

How is the market responding?

West Texas Intermediate (WTI) is trading at $98.05 at the time of writing, a decline of 0.02% for the day.

WTI Oil: Key Questions Answered

What distinguishes WTI Oil?

Among the varieties of crude oil traded internationally, WTI stands for West Texas Intermediate. Alongside Brent and Dubai Crude, it is one of the three major types. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. Regarded as a high-quality oil, WTI is easy to refine. Produced in the United States, it is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, with its price regularly cited in media reports.

What determines WTI Oil prices?

Supply and demand underpin WTI Oil prices, as they do those of other assets. Stronger global growth can lift demand, while weaker growth can have the reverse effect. Supply disruptions caused by political instability, wars and sanctions can also affect prices. Another important influence is the production decisions of OPEC, a grouping of major oil-producing countries. As oil is traded predominantly in US Dollars, the value of the US Dollar also matters for WTI Crude Oil prices: a weaker currency can make oil more affordable, while a stronger one can have the opposite effect.

Why do inventory figures affect WTI Oil prices?

WTI Oil prices respond to the weekly oil inventory releases from the American Petroleum Institute (API) and the Energy Information Agency (EIA). Movements in stockpiles signal changes in supply and demand. A decline may point to stronger demand and push oil prices higher; a build-up may indicate greater supply and put prices under pressure. The API releases its report every Tuesday, followed by the EIA the next day. The two sets of figures are generally close, coming within 1% of each other 75% of the time. As the EIA is a government agency, its figures are regarded as more reliable.

How do OPEC decisions shape WTI Oil prices?

At meetings held twice a year, the 12 oil-producing nations that make up OPEC (Organization of the Petroleum Exporting Countries) jointly set production quotas for member countries. These decisions frequently influence WTI Oil prices. Lower quotas can constrain supply and lift prices, whereas an increase in OPEC production has the reverse effect. The broader OPEC+ grouping brings together OPEC and ten additional non-OPEC members, with Russia the most notable among them.