- The price of WTI can face difficulties since the Organization for Economic Cooperation and Development has reviewed the forecasts of the global economy.
- The OECD has trimmed its global GDP growth forecast to 2.9% from 3.1% of previous estimates.
- Oil prices can face difficulties as the raw materials called in dollars become faces for holders of other currencies in the middle of a strengthened US dollar.
The price of oil West Texas Intermediate (WTI) remains stable after registering more than 3.50% profits, quoting around $ 62.50 during Asian hours on Tuesday. However, the prices of crude oil faced some challenges, potentially weighed by the Organization for Economic Cooperation and Development (OECD) that cut the forecasts of the global economy.
The OECD has reviewed its global GDP growth forecast for the current year to 2.9% from 3.1% of previous estimates. The global GDP growth forecast for next year has decreased slightly to 2.9% compared to the previous 3.0%. Meanwhile, the United States (USA), the largest oil consumer, grow 1.6% in 2025 compared to the previous 2.2% and 1.5% in 2026, slightly below the previous estimate of 1.6%.
In addition, oil prices can face challenges as the raw materials called in dollars become faces for holders of other currencies due to upward technical correction in the US dollar. The US dollar index (DXY), which measures the value of the US dollar (USD) compared to six main currencies, has bounced from a minimum of six weeks of 98.58 and is being negotiated higher than 98.90 at the time of writing.
However, oil prices gained ground as the ongoing geopolitical tensions increase concerns about a more adjusted global supply. Iran is prepared to reject a US nuclear agreement proposal that would be key to relieve sanctions on the oil producer. In addition, the second round of peace conversations between Russia and Ukraine, on Monday, did not achieve significant progress in the resolution of the conflict three years after an increase in hostilities on Sunday.
Reuters reported that the refineries around the world are obtaining unexpected profits from the production of key fuels in recent weeks. This has supported a sector in difficulties before an anticipated fall later this year, since plant closures have adjusted the fuel supply necessary to meet the maximum summer demand.
Petroleum prices shot after an increase in minor supply than expected of the Opec+Group, the organization of oil exporting countries and its allies. The oil group decided to increase production by 411,000 barrels per day (BPD) in July for the same amount during the third consecutive month.
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.
