- The WTI fights while the change in EIA crude oil stocks showed a strong increase in US crude oil inventories last week.
- Brazil could resume oil exports to the US after several oil products were exempt from the previous 10% tariff of the US.
- USA sanctioned more than 115 individuals, entities and ships linked to Iran.
The price of oil West Texas Intermediate (WTI) stops its three -day winning streak, quoting around $ 69,60 per barrel during the first European hours on Thursday. Crude oil prices fight, possibly driven by a surprise accumulation in the United States crude oil (USA).
The data of the US Energy Information Administration (EIA) showed that US crude oil inventories increased by 7,698 million barrels last week, compared to the expected decrease of 2.50 million barrels and 3,169 million previous barrels. The accumulation of oil marked the greatest increase in six months, challenging the forecasts of a decrease.
In addition, the price of oil faces challenges, since Reuters quoted the head of the Brazilian Petroleum Pressure Group IBP, who said that energy companies are expected to resume oil exports to the United States after several oil products were exempt from a 10% US rate in April. However, uncertainty persists on whether the merchandise would be exempt from the new rates announced on July 9, which led to a pause in shipments for most of the month.
Oil prices could recover land due to growing concerns about the supply, driven by the call of the US president, Donald Trump, to solve the war in Ukraine taking advantage of additional rates. Trump threatened Tuesday to impose secondary rates of 100% to Russia if he failed to end the war within 10 to 12 days, rising from an earlier period of 50 days.
The US Department of the Treasury announced new sanctions on Wednesday aimed at more than 115 individuals, entities and ships linked to Iran. This indicates a sign of the renewed commitment of the Trump administration with its “maximum pressure” campaign after bombing Tehran’s key nuclear sites in June, according to Reuters.
Trump said Wednesday that he would impose a rate of at least 25% to Indian exports to the US from Friday. He also criticized India for his continuous purchases of Russian energy, threatening sanctions on his imports of Russian crude. In addition, the US warned China on Tuesday, the largest Russian oil buyer, who would face huge rates if he continued to buy oil from Iran and Russia.
WTI oil – frequent questions
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.
