- The price of WTI gains land about $ 63,80 in the Asian session on Wednesday.
- The optimism around commercial conversations between the US and China supports the price of WTI.
- Crude oil reserves in the US fell unexpectedly in the week that ended on June 6, according to the API.
The West Texas Intermediate (WTI), the referent of the US crude oil, is negotiated around $ 63,80 during Wednesday’s Asian negotiation hours. The WTI price advances as operators digest the result of commercial conversations between the United States and China. The US consumer price (CPI) index (May IPC) and the EIA crude oil inventory report will be the points highlighted later on Wednesday.
Bloomberg reported early Wednesday that the US and China agreed to a preliminary agreement on how to implement the consensus to which both parties arrived in Geneva. American negotiators affirmed that “absolutely expect” that problems related to the shipments of rare earth and magnets minerals are resolved with the implementation of the framework, although the complete details of their agreement were not immediately available. Analysts expect a commercial agreement between the two largest economies in the world to support the price of WTI by boosting global economic growth and increasing oil demand.
The Weekly Report of the American Petroleum Institute (API) showed that crude oil reserves in the US for the week that ended on June 6 fell into 370,000 barrels, compared to a fall of 3.3 million barrels in the previous week. The market consensus estimated that reserves would increase by 700,000 barrels.
On the other hand, Iran said that he will soon submit a counteroffet for a nuclear agreement in response to an US offer that Tehran considers “unacceptable,” according to Reuters. Any sign of relaxation of US sanctions on Tehran should allow Iran to export more oil, which could limit the potential for increased crude oil prices.
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.
