WTI declines below $82.50 as oil inventories rise far more than expected

West Texas Intermediate (WTI), the US crude oil benchmark, is trading at $82.45 during early Asian trading on Thursday. The price decline stems from a significant rise in US crude oil inventories. Traders will be watching US-Iran talks for potential positive developments. US crude oil inventories increased more than anticipated last week.

According to the US Energy Information Administration (EIA), US crude oil stockpiles for the week ending August 7 rose by 17.422 million barrels, compared to an increase of 2.479 million barrels the previous week. The market expected a decline of 1.4 million barrels. Traders are awaiting signs of progress in opening the Strait of Hormuz.

Iran and the US are still at odds over efforts to agree on a permanent end to the Middle East conflict. Iran insists the waterway remains blocked, while US President Donald Trump claims Washington has total control. Experts warn that hopes for a rapid diplomatic fix to resolve shipping disruptions in the Strait of Hormuz might be unrealistic.

They argue that a short-term deal is unlikely, as both sides have significant differences. Instead, they expect any agreement to be a temporary solution, allowing for 60-day free transits while negotiations continue. WTI is a high-quality oil type that is easily refined, sourced in the United States and distributed via the Cushing hub.

The WTI price is influenced by supply and demand, global growth, political instability, OPEC decisions, and the value of the US Dollar. The weekly Oil inventory reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact WTI price, reflecting fluctuating supply and demand. When OPEC lowers production quotas, it can increase oil prices due to reduced supply. Conversely, increasing production can have the opposite effect.