- WTI crude oil rises above $ 65.00 as inventories continue to fall.
- The Supreme Leader of Iran promises to retal against new attacks from the United States.
- The recessing of tensions between Israel, Iran and the US can result in a greater extension of oil prices.
The West Texas Intermediate (WTI) is bouncing on Thursday after recent inventory data suggested that the demand continues to exceed the offer.
The WTI is currently being negotiated above the psychological level of $ 65.00 with intradic earnings of approximately 1.10% at the time of writing.
With the report of the Energy Information Administration (EIA) on Wednesday, highlighting another more acute decrease than expected in oil inventories, supply escases have provided temporary relief to oil prices.
In addition, despite the fact that a high fire between Israel and Iran seems to remain intact, the recent comments of the leader of Iran, Ayatolá Ali Khamenei, have provided an additional layer of uncertainty about the credibility of the Israel-Iran truce.
The Alto El Fuego Israel-Iran lets oil down, but the reports suggest that the supply remains moderate
After the announcement that Israel and Iran had officially agreed to a high fire agreement on Tuesday, investors celebrated, and the price of oil collapsed.
The tensions in the Middle East that exploded when Israel attacked Iran on June 12 highlighted the sensitivity of prices given the possible interruption of the Ormuz Strait.
With the markets hugging the possibility of a truce between Israel and Iran, WTI oil fell approximately $ 10.00 per barrel in 24 hours. However, inventory reports published throughout the week changed attention to the dynamics of supply and demand.
On Monday, the price of WTI had reached a maximum of $ 76.74 before falling to a minimum of $ 63.73 on Tuesday.
Wednesday’s EIA report revealed that oil inventories fell by 5.8 million barrels during the past week, exceeding the expectations of analysts from a 600k barrels.
Iran’s supreme leader promises to retal against new attacks from the United States
In the first televised interview from Alto El Fuego, Iran’s Supreme Leader declared that Iran would respond to any new US attack.
Reuters reports indicated what additional Khamenei comments included that “US president Trump revealed the truth and made it clear that Americans will not be satisfied with nothing less than surrender … such an event will never happen.”
If these comments translate into a broader escalation between the two nations, oil prices could recover as fears on possible supply interruptions are again in the center of attention.
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.
