- The WTI price is appreciated as Trump indicates the possibility of additional sanctions to Russia.
- The EU could reduce the Russian oil price limit as part of its next number 18 sanctions package against Moscow.
- The International Energy Agency reported that Saudi Arabia exceeded its objective of oil production, exceeding the implicit level in the OPEC+agreement.
The price of oil West Texas Intermediate (WTI) extends its profits per second consecutive session, quoting around $ 68,00 per barrel during the European hours on Monday. Crude oil prices receive support while operators expect the statement of the US president, Donald Trump, anticipating additional sanctions to Russia that could affect the global oil supply.
On Saturday, President Trump announced plans to make an important statement about Russia on Monday, although it did not provide additional details. In addition, Trump pointed out on Sunday that the US will send Patriot Air Defense systems to Ukraine, expressing frustration for the lack of disposition of the Russian president, Vladimir Putin, to negotiate an end to the invasion of Moscow. Meanwhile, reports suggest that the envoys of the European Union (EU) are close to reaching an agreement on a number 18 sanctions package against Russia, which is expected to include a lower pricing limit for Russian oil.
However, the potential for increased oil prices could be limited in the midst of the increase in oil production in Saudi Arabia and ongoing tariff tensions that weaken the global oil demand. The International Energy Agency (AIE) reported that Saudi Arabia exceeded its oil production objective in 430,000 barrels per day in June, reaching 9.8 million BPD, compared to the implicit objective of the organization of oil exporting countries and its allies, including Russia (OPEP+), of 9.37 million BPD.
The Ministry of Energy of Saudi Arabia responded, saying that the kingdom had fully fulfilled its voluntary production objective of the OPEC+, informing that the supply of crude oil marketed by Saudi Arabia in June was 9,352 million BPD, according to the agreed quota, according to Reuters.
The president of the United States, Donald Trump, imposed, on Saturday, a 30% tariff on imports from the European Union (EU) and Mexico as of August 1. Trump also proposed a general tariff rate of 15%-20%for other commercial partners, an increase with respect to the current base rate of 10%. Reports suggest that the EU has initiated discussions with other countries affected by tariffs, including Canada and Japan, with the aim of exploring coordinated responses.
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.
