WTI traded around $62.80 per barrel in Asian hours on Monday after opening above the previous close. Price movement was limited as US markets were closed for Presidents’ Day and Asian activity was reduced by Lunar New Year holidays in China, South Korea and Taiwan.
Attention is on the second round of US-Iran talks in Geneva on Tuesday. Tehran indicated it may accept nuclear concessions if US sanctions are addressed, while President Donald Trump has warned of possible strikes if talks fail and the US has raised its regional military presence.
Geopolitical Risks And Market Focus
US-brokered Russia-Ukraine talks are also due to resume on Tuesday, with limited expectations of a quick agreement or near-term return of Russian oil to global markets. Slovak Prime Minister Robert Fico said Ukraine is delaying the restart of a pipeline carrying Russian oil to Eastern Europe, to pressure Hungary over its stance on Ukraine’s EU membership.
Supply conditions are also in focus after Reuters reported OPEC+ is leaning towards restarting output increases from April following a three-month pause. The move is linked to planning for peak summer demand.
WTI is a US crude benchmark produced in the United States and distributed via the Cushing hub. US inventory reports from the API and EIA can affect prices; their results are within 1% of each other 75% of the time.
Looking back a year ago in early 2025, we saw oil holding near $63 a barrel as the market awaited talks between the US and Iran. Those talks ultimately failed, which has contributed to the more tense environment we see today. With WTI now trading around $82, the factors driving prices have become much clearer.
Key Indicators To Watch
The collapse of those Geneva negotiations in 2025 has kept a risk premium in the market. OPEC+, which had considered raising output back then, has since reversed course to support prices. In fact, the group agreed last month to roll over its existing production cuts, keeping about 2 million barrels per day off the market through the second quarter.
In the coming weeks, we should watch inventory data closely as a sign of immediate market balance. Last week’s Energy Information Administration (EIA) report showed a surprise drawdown in US crude inventories of 3.1 million barrels, against expectations of a small build. Another draw would suggest demand is robust, creating a strong floor for prices and making call options more attractive.
On the demand side, the picture also looks much stronger than it did a year ago. The International Energy Agency’s latest forecast projects global demand to grow by 1.3 million barrels per day this year. Much of this growth is expected from China and India, suggesting any dips in price may be short-lived buying opportunities.
