- The WTI extends its recovery to a maximum of two weeks about $ 72.95 in the early Asian session on Wednesday.
- The increase in geopolitical tensions in the Middle East drives the price of WTI.
- The US crude oil reserves increased by 9,043 million barrels last week, according to the API.
The West Texas Intermediate (WTI), the reference crude oil in the US, is quoted around $ 72.95 during the early Asian session on Wednesday. The WTI price rises to a maximum of two weeks amid the climbing of geopolitical tensions in the Middle East.
The latest US sanctions imposed on the Russian oil industry in January generated concerns about Russian and Iranian oil supplies, promoting the price of black gold. “With the US by pressing Iranian exports and sanctions still affecting Russian flows, Asian crude qualities remain firm and underpin yesterday’s rebound,” said PVM oil analyst John Evans.
In addition, the growing geopolitical risks in the Middle East contribute to WTI rise. Israeli prime minister Benjamin Netanyahu said that if Hamas did not release Israeli hostages before noon on Saturday, a fragile high fire in Gaza would end. These statements occurred after the president of the USA, Donald Trump, urged Hamas to free all the prisoners before noon on Saturday or would consider canceling the high fire between Israel and Hamas and “let the Hell is unleashed. “
The US oil reserves increased sharply last week, which could limit the WTI rise. The weekly report of the American Petroleum Institute (API) showed that crude oil reserves in the United States for the week that ended on February 7 increased by 9,043 million barrels, compared to an increase of 5,025 million barrels in the week former. The market consensus estimated that reserves would increase by 2.8 million barrels.
On Monday, Trump increased tariffs on the imports of steel and aluminum to the United States to 25% “without exceptions or exemptions.” Analysts believe that Trump administration tariff policies could be inflationary and put more pressure on the Fed to maintain high interest rates. This, in turn, could raise the dollar and drag down the price of raw materials called in USD.
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.
