Iran says it and Mecca pact states agree to pursue peace

Four countries agreed on Monday to sustain security talks and strengthen regional cooperation. Iran, Saudi Arabia, Pakistan and Turkey reached the agreement following high-level discussions in Tehran, according to Islamic Republic of Iran Broadcasting (IRIB).

Continued dialogue and consultations, with a particular focus on regional peace, security and stability, were agreed by the four countries, a joint statement said. The statement followed the first meeting between Iran and senior officials representing the Mecca Joint Defence Agreement.

Saudi Defence Minister Prince Khalid bin Salman, Pakistan’s army chief Asim Munir and Turkey’s intelligence chief Ibrahim Kalin attended the meeting. Mohsen Rezaei, Secretary of Iran’s Supreme National Security Council, hosted the talks.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

WTI market response

West Texas Intermediate (WTI) is trading at $100.43 at the time of writing, a decline of 0.15% on the day.

WTI Oil: Key Questions

WTI Oil: What Defines This Crude Benchmark?

West Texas Intermediate, abbreviated to WTI, is a crude oil grade traded internationally. Alongside Brent and Dubai Crude, it is one of three major types. Its relatively low gravity and sulphur content earn it the descriptions “light” and “sweet”, respectively. This high-quality oil is considered easy to refine. Produced in the United States, WTI is distributed through the Cushing hub, known as “The Pipeline Crossroads of the World”. WTI serves as an oil market benchmark, with its price regularly cited by the media.

WTI Oil Prices: Which Drivers Matter?

Supply and demand underpin WTI oil prices, as they do those of other assets. Stronger global growth can lift demand, while weaker growth can have the reverse effect. Supply disruptions caused by political instability, wars or sanctions can also affect prices. Another major influence is policy set by OPEC, a group of leading oil-producing countries. WTI crude oil prices are also sensitive to the US Dollar because oil is traded mainly in US Dollars. A weaker US Dollar can therefore make oil more affordable, while a stronger currency can have the opposite effect.

WTI Oil: How Do Inventory Figures Affect Prices?

Weekly oil stock reports from the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence WTI oil prices by showing shifts in supply and demand. A drawdown in inventories can signal stronger demand and lift oil prices. Conversely, a build in stocks can indicate greater supply and weigh on prices. The API releases its report every Tuesday, followed by the EIA the next day. The two sets of figures generally align: 75% of the time, they are within 1% of each other. As a government agency, the EIA is regarded as the more reliable source.

WTI Oil: How Does OPEC Shape Prices?

12 oil-producing nations form OPEC (Organization of the Petroleum Exporting Countries). At meetings held twice a year, members jointly set national production quotas, with decisions frequently influencing WTI oil prices. Lower quotas can restrict supply and lift oil prices; increased production can have the reverse effect. The broader OPEC+ group brings in ten additional non-OPEC members, most notably Russia.