- The WTI price drops to around $ 65.15 in the first Asian session on Tuesday.
- Iran’s retaliation missile attack on an US Air Base increased hope that the conflict does not immediately interrupt oil supplies.
- The moderate tone of the Fed could weigh on the US dollar and help limit the losses of the WTI.
The West Texas Intermediate (WTI), the referent of the US crude oil, is quoted around $ 65.15 during the Asian negotiation hours on Tuesday. The price of WTI falls since the president of the United States, Donald Trump, said that the fire between Iran and Israel has agreed, relieving the fears of interruption of the supply in the region.
The Parliament of Iran has voted to close the Ormuz Strait in retaliation for Trump’s attack to the country during the weekend. However, no victims were reported after the attack. Instead, I was attacked a US military base in Qatar in retaliation for US attacks on their nuclear facilities.
In addition, Trump said on Monday that a high “complete and total” fire between Israel and Iran will enter into force to end the conflict between the two nations. The initial impact of the conflict on oil and gas markets remained relatively limited, which could weaken the short -term WTI price.
On the other hand, the moderate comments of the Federal Reserve officials (FED) could weigh on the dollar and support the price of raw materials called in USD. Fed’s supervision vice president Michelle Bowman said Monday that the time to cut interest rates is approaching, since the risks to the labor market could be increasing. A weaker USD makes oil cheaper for foreign buyers, increasing demand and pushing up rising prices.
Petroleum operators will take more signals from the semiannual testimonies of President Jerome Powell and the publication of US consumer confidence later on Tuesday. In addition, the weekly inventories of crude oil inventories of the American Petroleum Institute (API) is expected for the same day.
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.
