- Crude oil prices are recovering short -term losses caused by an increase in production planned by OPEC.
- The WTI briefly fell below $ 65 per barrel while the fears of excess global supply.
- The OPEC is ready to reverse its two -year self -imposed production cut from June.
West Texas Intermediate (WTI) crude oil prices are stabilized on Monday, recovering short -term losses after the organization of oil export countries (OPEC) announced that it would begin to increase its internal production quotas from June. This movement is generally seen as a way of punishing the smallest member nations of the OPEC that ignored the voluntary production limits, including Kazakhstan and Iraq.
Excess global crude oil is coming
Energy markets still cling to the hope that entraging sanctions to the Russian energy sector will absorb the excess of imminent supply of OPEC production increases. However, the concrete figures remain elusive, and it is not clear if the Trump administration will carry out sanctions against Russia, an acquaintance of President Trump. According to data collected by Bloomberg, Russian energy exports reached a maximum of five months in March, and Weekly exports of Russian crude oil have also increased weekly until the end of April.
WTI price forecast
WTI barrel offers briefly fell below $ 56.00 on Monday, lowering to a short -term minimum of $ 55.14 before recovering land during the intradic session towards the $ 57 region. The US oil prices of the United States continue to fall dramatically from the peaks of mid -April about $ 64.00 per barrel. However, it seems that a technical floor has been set at the level of $ 56.00.
WTI DAILY GRAPH
WTI FAQS oil
WTI oil is a type of crude oil that is sold in international markets. WTI are the acronym of West Texas Intermediate, one of the three main types that include the Brent and Dubai’s crude. The WTI is also known as “light” and “sweet” by its relatively low gravity and sulfur content, respectively. It is considered high quality oil that is easily refined. It is obtained in the United States and is distributed through the Cushing Center, considered “the crossing of the world.” It is a reference for the oil market and the price of WTI is frequently traded in the media.
Like all assets, supply and demand are the main factors that determine the price of WTI oil. As such, global growth can be a driver of the increase in demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can alter the offer and have an impact on prices. OPEC decisions, a group of large oil -producing countries, is another key price factor. The value of the US dollar influences the price of WTI crude oil, since oil is mainly traded in US dollars, so a weaker dollar can make oil more affordable and vice versa.
Weekly reports on oil inventories published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI oil. Changes in inventories reflect the fluctuation of supply and demand. If the data show a decrease in inventories, it can indicate an increase in demand, which would raise the price of oil. An increase in inventories may reflect an increase in supply, which makes prices lower. The API report is published every Tuesday and that of the EIA the next day. Their results are usually similar, with a 1% difference between them 75% of the time. EIA data is considered more reliable, since it is a government agency.
The OPEC (Organization of Petroleum Exporting Countries) is a group of 13 nations oil producing that collectively decide the production quotas of member countries in biannual meetings. Their decisions usually influence WTI oil prices. When OPEC decides to reduce fees, it can restrict the supply and raise oil prices. When OPEC increases production, the opposite effect occurs. The OPEC+ is an expanded group that includes another ten non -members of the OPEC, among which Russia stands out.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
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