WTI slips below $58.50 due to possible Ukraine-Russia ceasefire

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West Texas Intermediate (WTI) Oil price loses ground after registering more than 1% gains in the previous session, trading around $58.30 per barrel during the Asian hours on Thursday.

WTI price falls as the possible Ukraine-Russia ceasefire could lift Western sanctions on Russian Oil.
US envoy Steve Witkoff will visit Moscow next week for talks with Russian leaders on ending the Ukraine war.
Scepticism persists, and even with a deal, any increase in Russian shipments is expected to take time.

West Texas Intermediate (WTI) Oil price loses ground after registering more than 1% gains in the previous session, trading around $58.30 per barrel during the Asian hours on Thursday. Crude Oil prices fell on reports of a potential Ukraine–Russia ceasefire, though overall trading remained thin due to the US Thanksgiving holiday.

The possible ceasefire has raised speculation that Western sanctions on Russian Oil could eventually be rolled back. Adding to this optimism, US envoy Steve Witkoff will travel to Moscow next week alongside other senior US officials for discussions with Russian leaders on a plan to end the nearly four-year-old war in Ukraine, the deadliest conflict in Europe since World War II.

However, a senior Russian diplomat said on Wednesday that Moscow will not make major concessions on a peace plan, following a leaked recording of a call in which Witkoff appeared to advise Russian officials on how to present their case to US President Donald Trump.

Oil prices edged higher as investors sought clarity on future supply amid the ongoing Russia–Ukraine peace efforts. Still, scepticism remains over whether the talks will lead to a breakthrough anytime soon, and even if an agreement is reached, markets expect any increase in Russian shipments to take time to materialise.

Reuters reported three OPEC+ sources earlier this week, saying that the Organization of the Petroleum Exporting Countries and its allies are expected to keep production levels unchanged at Sunday’s meeting. Some members of the group, which supplies about half of the world’s oil, have been increasing output since April to capture additional market share.

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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.