- The price of oil seeks to extend recovery above $ 60.00 in the hope that the commercial war between the US and China has reached its maximum point.
- USA and China will meet this week for commercial discussions.
- OPEC+ has announced that it will accelerate oil production at a higher pace.
The crude West Texas Intermediate (WTI), futures in Nymex, seeks to extend its two -day recovery movement above the key resistance of 60.00 $ during European negotiation hours on Wednesday. The prospects for the price of oil have improved in the short term with the hope of a decala in the commercial war between the United States (USA) and China.
On Tuesday, US Treasury Secretary Scott Besent, and Commerce Representative Jamieson Greer, confirmed that they will meet their Chinese counterparts for commercial and economic discussions this week in Switzerland.
Besent pointed out that discussions will focus more on de -displaying the tariff war, since the high tariffs imposed by both nations are not sustainable in the long term. “My impression is that this will be unincapted, not a great commercial agreement,” said Bisesent, according to CNBC.
Currently, the US and China have increased tariffs on each other by 145% and 125%. Initially, the US imposed an additional 54% surcharge to China, including a 20% punitive tariff due to drug trafficking in America, and increased to 145% after Beijing responded with tariff countertops.
The decreasing fear of a commercial war between the US and China is favorable for the price of oil, since China is the largest oil importer in the world.
Meanwhile, OPEC +’s decision to accelerate the elimination of production cuts of 2.2 million barrels per day (BPD) since September 2022 would limit the bullish potential in the price of oil. During the weekend, the oil sign announced that it will accelerate the rhythm of production increases to 960,000 in June due to the lack of compliance with the OPEC+ rules by Kazakhstan. At the end of April, Kazakhstan said that the underutilization of capacity due to the quotas imposed by the OPEC+ is harming its oil fields, and will prioritize its national interest in the objectives of the group.
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.
