- The price of WTI gains ground amid growing concerns for the offer after the attack of the hutis in the Red Sea.
- The implementation of US tariffs to the main business partners contributes to support oil demand.
- OPEC+ is ready to increase oil production by approximately 550,000 barrels per day in September.
The price of oil West Texas Intermediate (WTI) extends its winning streak for third consecutive session, quoting around $ 67,60 per barrel during the Asian hours on Wednesday. Crude oil prices can continue to gain ground due to growing concerns about supply interruptions, driven by renewed geopolitical risks.
Yemen’s hutis, on Tuesday, attacked a bulk vessel with Liberian flag in the Red Sea, killing three sailors and hurting two others. The reports indicate that the ship sank, which generates concerns about possible interruptions on critical shipping routes from the Middle East to Europe and Asia. On Monday, a drone attack on a ship managed by Greece left two crew members already injured two other disappeared.
However, the bullish potential of crude oil prices could be restricted as oil operators adopt caution before the new threats of US tariff Provides support for oil demand. Trump moved the previous deadline from July 9 to August 1 and declared: “Extensions will not be granted.”
The organization of oil exporting countries and its allies, known as OPEP+, is preparing to approve an increase of approximately 550,000 BPD for September when it meets on August 3. This follows the decision of the Saturday oil group to increase oil production by 548,000 barrels per day in August.
The Energy Information Administration (EIA) published its monthly report on Tuesday, predicting that the United States (USA) will produce less oil in 2025 than expected above. This could be attributed to the fall in oil prices, which have led American producers to slowly dig this year.
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.
