- The WTI price maintains losses as global commercial tensions intensify after the renewed tariff threats of President Trump.
- The OPEC+ struggles to enforce production objectives in the midst of an increase in crude oil production in February, mainly driven by Kazakhstan.
- Gasoline stocks in the US collapsed in 5.7 million barrels, exceeding analysts’ expectations of a decrease of 1.9 million barrels.
The price of crude oil West Texas Intermediate (WTI) remains subdued after two days of profits, quoting around $ 67,40 per barrel during the first European hours on Thursday. However, crude oil could face winds against as operators change their focus on growing global commercial tensions.
The president of the United States, Donald Trump, threatened with additional tariffs in response to the reprisal measures of the European Union (EU) against the United States (USA). After the US imposed a 25% tariff on European steel and aluminum, the EU responded with tariffs on US goods for a value of 26,000 million euros in April. Trump’s aggressive position on tariffs has worried investors, weakened the confidence of consumers and companies, and increased the fears of a recession in the US.
Petroleum prices could also face down pressure after the Organization of Petroleum Exporting Countries (OPEC) reported a significant increase in crude oil production in February, led by Kazakhstan. This increase highlights the challenges for OPEC+ in maintaining adhesion to the agreed production objectives, according to Reuters.
On the other hand, oil found support on Wednesday, since US data pointed to strong internal demand and inflation in deceleration, relieving investors’ concerns. Government figures showed that gasoline stocks in the US fell into 5.7 million barrels – far as the expectations of analysts from a decrease of 1.9 million barrels – while distilled stocks also fell more than anticipated. This strong decrease in gasoline stocks reinforced the expectations of a seasonal increase in demand in spring.
According to Reuters, JP Morgan analysts highlighted signs of a robust demand in the US, together with the deployment of 377 Ukraine drones aimed at energy infrastructure and Russian military sites, such as factors that support oil prices. “As of March 11, the global oil demand averaged 102.2 million barrels per day, growing at 1.7 million barrels per day year -on -year and exceeding our monthly increase projected in 60,000 barrels per day,” they said.
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.
