- Oil can be seen even more while markets are prepared for US sanctions on Russian crude oil.
- China’s solid commercial activity data have relieved concerns about demand and proportioned additional support for oil prices.
- The news that OPEC+ would consider pausing supply increases is also contributing to WTI recovery.
The prices of crude oil extended the profits on Monday, reaching levels greater than $ 68.00 for the first time since the end of June, supported by a mixture of highly probable sanctions of the US against Russia, solid macroeconomic data from China and the news that OPEC+ could pause supply increases as of October.
Trump announced an “important statement” about Russia on Monday, while resuming the sending of patriot missiles to Ukraine due to his frustration with the Russian president, Putin, and his reluctance to accept the terms of a high fire.
The market anticipates more sanctions on Russian oil, which could adjust the global offer and push up prices.
Beyond that, China’s trade balance data revealed a surplus greater than expected in June, driven by a strong increase in exports. These figures have raised expectations about the recovery of the second largest economy in the world and improved perspectives for global oil demand.
On Friday, Market Fuentes reported that the members of the OPEC+ would consider pausing supply increases in October, which relieved the fears of a possible excess offer, since commercial restrictions and the weak global economic panorama will probably be a serious weight for medium -term demand.
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.
