- The price of WTI wins impulse around $ 63.25 in the first bars of the Asian session on Wednesday.
- The US and China cut tariff rates by 115%, supporting the price of WTI.
- Crude oil reserves in the US increased by 4,287 million barrels last week, according to the API.
The West Texas Intermediate (WTI), the referent of the US crude oil, is negotiated around $ 63.25 during Wednesday’s Asian negotiation hours. The price of WTI extends its upward trend in the midst of the relaxation of commercial tensions between the United States (USA) and China, which leads operators to reduce the probabilities of a recession.
The US and China agreed over the weekend in Switzerland to cut tariff rates by 115%. The president of the USA, Donald Trump, agreed to reduce additional tariffs on Chinese imports in April of this year from 145% to 30%, and Chinese tariffs on US imports will be reduced from 125% to 10%. The new tariff rate is effective for 90 days. A temporary cut in tariffs between the US and China, the two largest oil consumers in the world, could boost the price of the short -term WTI.
The weekly report of the American Petroleum Institute (API) showed that crude oil reserves in the US for the week that ended on May 9 increased by 4,287 million barrels, compared to a fall of 4.49 million barrels in the previous week. The market consensus estimated that the reserves would fall by 2.4 million barrels.
The organization of oil exporting countries and its allies (OPEC+) are ready to increase oil exports in May and June, which could limit the bullish black gold potential. OPEC has increased oil production more than expected since April, with a production in May that will probably increase by 411,000 barrels per 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.
