OIL.WTI is a derivative CFD instrument based on quotations of West Texas Intermediate (WTI) crude oil futures contracts, on Chicago Mercantile Exchange (CME). As a leveraged product, OIL.WTI allows traders to gain exposure to the global oil market with a fraction of the capital required for direct investment. This instrument is popular among traders seeking to capitalize on short-term price movements in WTI crude oil futures.
West Texas Intermediate (WTI) crude oil is a global benchmark for oil prices. WTI crude oil futures contracts are traded on the New York Mercantile Exchange (NYMEX), part of the CME Group. These contracts allow producers, consumers, and speculators to hedge against price volatility or to profit from price changes.
What is WTI crude oil?
West Texas Intermediate, commonly known as WTI, is one of the world’s principal crude oil benchmarks. It is a light, relatively low-sulphur crude oil produced in the United States.
WTI crude oil futures are listed on the New York Mercantile Exchange, which forms part of CME Group. The contracts are used by oil producers, refiners, businesses and financial-market participants for price discovery, risk management and speculation.
OIL.WTI trading hours
The underlying WTI crude oil futures market operates for almost 24 hours a day between Sunday and Friday, with a daily maintenance break.
The trading hours available for the OIL.WTI CFD may differ from those of the underlying futures market and may also change during holidays or periods of reduced market liquidity.
Always check the current OIL.WTI instrument specification on the XTB platform before opening a position.
When can OIL.WTI volatility increase?
WTI oil prices can move throughout the trading day, but volatility and trading volume may increase around particular events.
US inventory data
The US Energy Information Administration’s Weekly Petroleum Status Report contains information about crude oil inventories, refinery activity, imports, production and demand.
It is normally released at 10:30 a.m. Eastern Time on Wednesdays, although the schedule may change during holiday weeks.
Unexpected increases or decreases in US oil inventories can result in rapid movements in WTI prices.
OPEC and OPEC+ announcements
Decisions concerning oil-production targets can affect expectations for global supply. Announcements from OPEC and the wider OPEC+ group may therefore lead to increased volatility in oil markets.
Geopolitical developments
Military conflict, sanctions, political instability and disruption to important shipping routes can affect the availability and transportation of crude oil.
Oil prices may react particularly strongly when events involve major producing countries or strategically important locations.
US and European market hours
Liquidity may increase when European and US trading hours overlap. This can result in greater trading activity, although higher liquidity does not necessarily mean that prices will move in a predictable direction.
Unexpected news
WTI prices can react outside normal business hours to weather developments, government announcements, production disruptions and other breaking news.
Important oil-market reports
Traders commonly monitor several reports and datasets when analysing the oil market.
EIA Weekly Petroleum Status Report
Published by the US Energy Information Administration, this report provides weekly information about US crude oil inventories, production, imports, refinery activity and petroleum-product supply.
OPEC Monthly Oil Market Report
This monthly report covers developments in the global economy, oil demand, oil supply, production and market conditions.
International Energy Agency Oil Market Report
The IEA report provides analysis and forecasts covering global oil supply, demand, inventories, refining activity and trade.
Baker Hughes Rig Count
The Baker Hughes Rig Count tracks the number of active drilling rigs. Changes in drilling activity can provide an indication of possible future changes in US oil production.
American Petroleum Institute data
The API publishes weekly estimates of US crude oil and petroleum-product inventories. These figures are usually released before the official EIA report and may influence market expectations.
What affects the price of WTI crude oil?
Global supply and demand
Oil prices are strongly influenced by the relationship between global production and consumption.
Prices may come under upward pressure when demand rises faster than available supply. Conversely, weaker demand or increased production may place downward pressure on prices.
OPEC+ production policy
Production increases, reductions and compliance with agreed output targets can affect the expected supply of oil entering the global market.
Economic growth
Oil is widely used in transport, manufacturing and industrial activity. Expectations of stronger economic growth can support forecasts for higher oil demand, while concerns about recession may weaken the demand outlook.
Geopolitical risk
Conflict, sanctions and political instability can disrupt oil production, exports or transportation infrastructure.
The market may also react to the perceived risk of disruption, even when physical supply has not yet been affected.
US dollar movements
Crude oil is generally priced in US dollars. Changes in the value of the dollar can therefore influence demand and the price paid by buyers using other currencies.
However, the relationship between the dollar and oil is not fixed, and other market factors may have a greater influence at any given time.
Oil inventories
Inventory levels provide an indication of the balance between current supply and demand.
Rising inventories may suggest that supply is exceeding consumption, while falling inventories may indicate stronger demand or tighter supply.
Production costs and technology
Technologies such as hydraulic fracturing and horizontal drilling have increased the ability of US producers to respond to price changes.
However, production decisions also depend on operating costs, financing conditions, infrastructure and expectations for future oil prices.
Weather conditions
Severe weather can disrupt offshore production, refineries, pipelines, ports and shipping.
Seasonal weather patterns can also affect demand. For example, colder winters may increase demand for heating fuels, while the US summer driving season can influence demand for petrol and crude oil.
WTI versus Brent crude oil
WTI and Brent are both widely followed crude oil benchmarks, but they represent different markets.
WTI is primarily associated with the United States, and its principal delivery point is Cushing, Oklahoma. Brent represents crude oil produced in the North Sea and is widely used as an international pricing benchmark.
The price difference between WTI and Brent is known as the Brent–WTI spread. It can change in response to:
- Regional supply and demand
- Transportation and storage constraints
- US crude oil production
- Export capacity
- Refinery demand
- Geopolitical developments
Brent does not always trade above WTI. The relationship between the two benchmarks changes according to prevailing market conditions.
