US President Donald Trump describes position with Iran as brilliant

The US has no immediate plan to attack Iran, US President Donald Trump said on Tuesday, according to the Financial Times. Striking an optimistic tone, Trump said that "we appear to be achieving all our objectives," and characterised the position regarding Tehran as "a brilliant situation."

Separately, American citizens were warned of possible further attacks by Iranian-backed Houthi forces on airports and critical infrastructure in an updated security alert issued on Tuesday by the US Embassy in Saudi Arabia, Reuters reported. The embassy has also limited staff travel to areas including the kingdom’s principal oil-producing and export regions.

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

A drone that the Saudi-led coalition said had been launched by the Houthis towards southern Saudi Arabia was intercepted and destroyed, the coalition reported on Tuesday.

How Is WTI Reacting?

West Texas Intermediate (WTI) is trading at $95.77 at the time of writing, a gain of 0.01% for the day.

WTI Oil: Key Questions Answered

What Defines WTI Oil?

Among the three major crude oil varieties traded internationally are West Texas Intermediate, abbreviated as WTI, Brent and Dubai Crude. WTI’s relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. This high-quality oil is regarded as easy to refine. Produced in the United States, it is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. As an oil-market benchmark, WTI has a price that is regularly cited by the media.

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 weak global growth can have the reverse effect. On the supply side, political instability, wars and sanctions can cause disruptions that affect prices. Another major influence is the production policy of OPEC, a group of leading oil-producing countries. Because oil is largely traded in US Dollars, the currency’s value also affects WTI crude prices: a weaker US Dollar 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 inventory reports released by the American Petroleum Institute (API) and the Energy Information Agency (EIA), as stock movements reflect shifts in supply and demand. A decline in inventories may signal stronger demand and push oil prices higher. Conversely, a build-up can indicate greater supply and weigh on prices. Each Tuesday brings the API report, followed by the EIA release the next day. The two reports generally produce similar results, with readings 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; an increase in OPEC production has the reverse effect. The broader OPEC+ grouping brings in ten additional non-OPEC members, with Russia the most notable among them.