WTI Oil tumbles on easing Middle East tensions, steady OPEC+ output

Finance

WTI Oil tumbles on easing Middle East tensions, steady OPEC+ output

West Texas Intermediate (WTI) US Oil trades around $61.90 on Monday at the time of writing, down 5.50% on the day. WTI prices remain under pressure as markets react to signs of easing tensions between the United States (US) and Iran, which could alter supply expectations in the global energy market.

Sentiment deteriorated after comments from US President Donald Trump, who said on Sunday that the United States hopes to reach a deal with Iran. These remarks come against a backdrop of regional tensions, after Irans Supreme Leader Ayatollah Ali Khamenei warned that a US attack could trigger a broader conflict. For investors, the prospect of an agreement with Iran, one of the main producers within the Organization of the Petroleum Exporting Countries (OPEC), could pave the way for a relaxation of sanctions and, eventually, an increase in Crude Oil supply, weighing on WTI prices.

At the same time, the Organization of the Petroleum Exporting Countries and its allies (OPEC+), confirmed on Sunday its decision to keep output unchanged for March. The group also announced that its next meeting will take place on March 1. This decision follows the earlier freeze of planned production increases, reflecting expectations of seasonally weaker demand in the coming months. While this supply discipline aims to support market stability, it has not been enough to offset the negative impact of recent geopolitical developments.

Traders are now turning their attention to upcoming US Oil inventory data, with the American Petroleum Institute (API) report due on Tuesday.