- The WTI attracts strong vendors for the second consecutive day in the middle of the high fire between Israel and Iran.
- Fed feature clippings in Julio weigh on the USD, which offers support to the raw material.
- The operators expect interest in the testimony of the president of the FED, Jerome Powell, for a new impulse.
The prices of crude oil West Texas Intermediate (WTI) of the US extends the sharp decline in the previous day from the area of ​​76.75 $, or a maximum of five months, and attract some continuous sale for the second consecutive day on Tuesday. However, the raw material cuts part of its strong losses of the Asian session to a minimum of almost two weeks and currently trades just above the 66.00 $ brand, with a fall of more than 1.30% in the day.
Investors breathed relieved in reaction to Iran’s contained attack on an American military base in Qatar, instead of Petroleros in the Ormuz Strait. In addition, US president Donald Trump announced a full fire between Israel and Iran. This helps relieve market concerns about supply interruptions from the Middle East, an important oil producing region, and turns out to be a key factor that weighs strongly on crude oil prices.
Meanwhile, the operators increased their bets due to a possible cut of interest rates by the Federal Reserve (FED) in July after the publication of mixed data of the US PMISs and moderate tone comments of influential members of the FOMC on Monday. This, together with the decrease in the demand for secure refuge, drags the US dollar (USD) to a minimum of more than a week and benefits the raw materials called in USD, helping oil prices to bounce from the area of ​​64.15 $.
The operators now expect with interest the US economic agenda, which includes the publication of the Conference Board Conference Conference Index and the Richmond manufacturing index. Apart from this, the Speeches of influential members of the FOMC, including the testimony of the president of the FED, Jerome Powell, will promote the USD. This, together with geopolitical developments, should provide a new impulse to oil prices later during the American session.
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.
