- The WTI price can recover land due to the growing concerns about the interruptions in the supply in the Ormuz Strait.
- President Trump published on social networks, asking for the “unconditional surrender” of Iran.
- The US Fed is expected to maintain interest rates without changes in 4.5% on Wednesday.
The price of oil West Texas Intermediate (WTI) goes back its recent profits recorded in the previous session, negotiating around $ 73.00 during Wednesday’s Asian hours. However, the price of the WTI was appreciated more than 5% on Tuesday due to the growing concerns about the interruptions in the supply in the Ormuz Strait, which manages approximately one fifth of the maritime oil of the world, in the midst of the climb of tensions in the Middle East.
On Tuesday, the US president, Donald Trump, published on his social media platform, asking for the “unconditional surrender” of Iran. The US Army is deploying more combat planes to strengthen its presence, according to three officials. Meanwhile, Israel could intensify its attacks against Iran, while the United States (USA) is considering expanding its role in the conflict.
President Trump said he wants a permanent purpose to Iran’s route to nuclear weapons after his early departure from the G-7 meeting in Canada. However, Tehran has urged several countries, including Oman, Catar and Saudi Arabia, to urge the US president, Donald Trump, to declare a high immediate fire.
Operators expect the US Federal Reserve to maintain its night reference interest rate in the range of 4.25% -4.50% at the June meeting scheduled for Wednesday, with a probability of almost 80% of a Fed fees cut in both Fed both in September and October.
However, Tony Sycamore, market analyst at IG, said that the current tensions in the Middle East and the risk of slower global growth could take the Fed to potentially cut the rates at 25 basic points in July, before the current expectation of the September market, according to Reuters.
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.
