- The WTI price advances even when concerns about the global offer increase after OPEC+ movements to accelerate production increases.
- OPEC+ has promised an additional increase of 411,000 barrels per day (BPD) for June.
- Oil prices remain vulnerable due to concerns about a recession and the weak demand for refined fuel imports.
The price of crude oil West Texas Intermediate (WTI) He continues to recover during the Asian negotiation on Tuesday, around $ 57.60 per barrel after a fall of almost 2% on Monday. However, the profits were limited by concerns about the increase in global offer after the OPEC+ decision to accelerate production increases.
Last week, OPEC+, the organization of oil exporting countries and its allies, agreed to increase production for the second consecutive month, announcing an additional increase of 411,000 barrels per day (BPD) for June. This increase, contributed by eight members, including Russia, has the combined increase for April, May and June to 960,000 BPD, effectively reversing 44% of the 2.2 million BPD in cuts implemented since 2022, according to Reuters estimates.
Sources within the group told Reuters that OPEC+ could completely reverse its volunteer cuts by the end of October if it does not improve compliance with production fees. Saudi Arabia is pressing the group to accelerate the reversal of the cuts to penalize Iraq and Kazakhstan for their repeated breach of the agreed production objectives.
David Wech, chief economist of the Vortexa Energy Analysis firm, told Reuters that the fears of recession and the weak demand for refined fuel imports are also affecting oil prices. Wech said that since mid -February, global oil stocks have increased by approximately 150 million barrels, stored in both tanks on land and aboard oil at sea.
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.
