WTI falls near $74.00 as Trump urges OPEC to reduce oil cost

  • WTI price falls to $74.10 in the early Asian session on Friday.
  • Trump said he will ask OPEC to lower oil prices.
  • US crude oil inventories fell by 1.017 million barrels last week, according to the EIA.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $74.10 on Friday. The price of WTI extends its fall after US President Donald Trump urged Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to reduce their prices.

Uncertainty over how Trump’s proposed tariffs and energy policies could weigh on the price of WTI. Trump said Thursday that he will ask Saudi Arabia and OPEC to lower the price of oil. “I’m also going to ask Saudi Arabia and OPEC to lower the cost of oil,” Trump said during his speech at the World Economic Forum in Davos, Switzerland.

Furthermore, expectations of an increase in US production under President Trump further undermine the price of WTI. Earlier this week, Trump declared a national energy emergency and used the authority to quickly approve new oil, gas and electricity projects that would normally take years to obtain permits.

US crude oil inventories fell for the ninth consecutive week. The weekly report from the US Energy Information Administration (EIA) showed that crude oil inventories in the United States for the week ending January 17 decreased by 1.017 million barrels, compared with a drop of 1,962 million barrels in the previous week. The market consensus estimated that inventories would decrease by 2.1 million barrels.

Oil traders will be watching developments around Trump’s policy announcements. Additionally, the preliminary US S&P Global Purchasing Managers’ Index (PMI) for January will be released later on Friday. In case of a weaker than expected outcome, this could drag the US Dollar (USD) lower and provide some support to the price of the USD-denominated commodity.

WTI Oil FAQs


WTI oil is a type of crude oil that is sold in international markets. WTI stands for West Texas Intermediate, one of the three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for 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 through the Cushing facility, considered “the pipeline junction of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.


Like all assets, supply and demand are the main factors that determine the price of WTI oil. As such, global growth can be a driver of increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can alter supply and impact prices. The decisions of OPEC, a group of large oil-producing countries, is another key price factor. The value of the US Dollar influences the price of WTI crude oil, as oil is primarily traded in US dollars, so a weaker Dollar can make oil more affordable and vice versa.


Weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI oil. Changes in inventories reflect the fluctuation of supply and demand. If the data shows a decline in inventories, it may indicate an increase in demand, which would drive up the price of oil. An increase in inventories can reflect an increase in supply, which drives down prices. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, with a difference of 1% between them 75% of the time. EIA data is considered more reliable since it is a government agency.


OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide member countries’ production quotas at biannual meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC member countries, including Russia.

Source: Fx Street

You may also like