- WTI fell to $80.00 per barrel on Wednesday, continuing to oscillate in an irregular range.
- EIA crude oil counts reported another weekly increase in US barrel supplies.
- Energy markets continue to expect a surge in summer demand to materialize.
US West Texas Intermediate (WTI) crude oil fell back to $80.00 per barrel on Wednesday after the Energy Information Administration (EIA) reported another unexpected increase in the weekly US crude oil stock change. .US, demolishing the expectations of barrel traders who were expecting a net decline in US crude oil supplies.
According to the EIA, the change in US crude oil stocks accumulated an additional 3.591 million barrels of crude oil for the week ending June 21, well above the forecast for a decline of 3 million barrels and exceeding the reduction of 2,547 million barrels from the previous week. Crude oil markets in the US shook after another weekly rise, sending WTI back to the $80.00 zone in reaction.
Energy markets are still holding out hope for a summer surge in fossil fuel demand due to rising cooling costs as well as the summer driving season. This follows a failed crude oil demand surge in China that failed to materialize as well as the US Memorial Day holiday driving season that also failed to make a significant dent in US crude oil supplies.
Technical Outlook for WTI
WTI continues to trade in a choppy range between $80.00 and $81.50, with a sizable supply zone keeping bullish momentum limited beyond $81.50. Intraday price action is crashing against the 200 hourly EMA which is rising through the $80.00 area.
The daily candlesticks continue to oscillate around the $81.00 area, and the ongoing consolidation paves the way for a bearish reversal towards the lower side of the 200-day EMA at $78.91. A push lower will leave WTI offers exposed to a further decline towards the early June low below $73.00 per barrel.
WTI hourly chart
WTI daily chart
WTI Oil FAQs
WTI oil is a type of crude oil that is sold in international markets. WTI stands for West Texas Intermediate, one of the three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easily refined. It is sourced in the United States and distributed through the Cushing facility, considered “the pipeline junction of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted 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 increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can alter supply and impact prices. The decisions of OPEC, 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, as oil is primarily traded in US dollars, so a weaker Dollar can make oil more affordable and vice versa.
Weekly oil inventory reports 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 shows a decline in inventories, it may indicate an increase in demand, which would drive up the price of oil. An increase in inventories can reflect an increase in supply, which drives down prices. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, with a difference of 1% between them 75% of the time. EIA data is considered more reliable since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide member countries’ production quotas at biannual meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC member countries, including Russia.
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.
