- The price of WTI gains ground amid growing threats on supply concerns.
- It is believed that the militias supported by Iran are behind the attacks of this week to the oil fields in the Iraqi Kurdistan.
- The US oil reserves fell at 3.9 million barrels last week, significantly exceeding the expectations of analysts from a reduction of 552,000 barrels.
The price of oil West Texas Intermediate (WTI) extends its profits for the second consecutive day, negotiating around $ 66.40 per barrel during Friday’s Asian hours. Crude oil prices are supported by concerns about supply risks.
According to a Reuters report, militias backed by Iran are the probable responsible for attacks on oil fields in the Iraqi Kurdistan this week; However, no group has claimed responsibility. As a result, oil production in the semi -autonomous region has been reduced by 140,000 to 150,000 barrels per day, more than half of its usual production of around 280,000 BPD, according to two energy officials.
In addition, US oil reserves fell at 3.9 million barrels last week, according to government data, compared to analysts’ expectations in a Reuters survey for a reduction of 552,000 barrels. The International Energy Agency said last week that the increase in production has not translated into greater reserves, which indicates a robust demand.
JPMorgan analysts reported that seasonal travel activity has also supported the market. In the first half of July, the global oil demand averaged 105.2 million barrels per day, an increase of 600,000 BPD compared to the previous year and in line with the projections, according to Reuters.
ING analysts said Friday that short -term oil foundations will probably remain favorable, with the expected market that remains relatively adjusted during the current quarter before relaxing something in the last three months of the 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.
