- WTI prices halted their losing streak due to a drop in the Weekly Crude Oil Stocks in the previous week.
- The EIA’s Crude Oil Inventories Change report is expected to show an increase of 0.7 million barrels for the week ending July 19.
- Israeli Prime Minister Benjamin Netanyahu will address the US Congress, seeking to redirect American attention toward the Middle East.
West Texas Intermediate (WTI) crude oil prices are struggling to halt their four-day losing streak, trading around $77.40 per barrel during European hours on Wednesday. Declining US crude inventories are helping to support crude oil prices.
On Tuesday, the American Petroleum Institute (API) reported a 3.9 million barrel drop in the Weekly Crude Oil Stocks for the week ending July 19, beating market expectations of a 2.47 million barrel decline. This follows a previous drop of 4.44 million barrels. The U.S. Energy Information Administration (EIA) Crude Oil Stocks Change report, scheduled for Wednesday, is anticipated to show a 0.7 million barrel increase for the same period.
However, crude oil prices faced challenges during Asian hours, likely due to increased optimism surrounding possible ceasefire negotiations between Israel and Hamas. Israeli Prime Minister Benjamin Netanyahu has hinted at a possible ceasefire deal that could lead to the release of several hostages in Gaza.
Israeli Prime Minister Netanyahu is currently in Washington to address Congress. On Friday, Netanyahu will meet Republican presidential candidate Donald Trump at Trump’s Mar-a-Lago resort, signaling an effort to improve ties between the two men, according to Reuters. U.S. Vice President Kamala Harris will also meet with Netanyahu at the White House this week. However, Harris will not chair a joint session of Congress.
An aide to Harris told PTI: “We anticipate that the Vice President will convey her view that it is time for the war to end in a way where Israel is secure, all hostages are freed, the suffering of Palestinian civilians in Gaza ends, and the Palestinian people can enjoy their right to dignity, freedom and self-determination. They will discuss efforts to reach a ceasefire agreement.”
The increased likelihood of a Federal Reserve (Fed) rate cut in September is putting pressure on the US dollar. A weaker dollar could make oil cheaper for buyers using other currencies, which could help demand for the commodity. In addition, lower interest rates could stimulate economic activity in the United States, the world’s largest oil consumer, which could help support oil prices.
Investors are expected to closely monitor the US Purchasing Managers’ Index (PMI) data, due later in the North American session. In addition, attention will be focused on the annualized second-quarter Gross Domestic Product (GDP) figures, due on Thursday. These reports are expected to offer fresh insights into economic conditions in the United States.
WTI Oil FAQs
WTI crude oil is a type of crude oil sold on international markets. WTI stands for West Texas Intermediate, one of three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easily refined. It is sourced in the United States and distributed through the Cushing hub, considered “the pipeline crossroads of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted in the media.
Like all assets, supply and demand are the main factors determining the price of WTI crude oil. As such, global growth can be a driver of increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can disrupt supply and impact prices. Decisions by OPEC, a group of large oil producing countries, are another key driver of price. The value of the US Dollar influences the price of WTI crude oil, as oil is primarily traded in US Dollars, so a weaker Dollar can make oil more affordable and vice versa.
The weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI oil. Changes in inventories reflect fluctuations in supply and demand. If the data show a decrease in inventories, it may indicate an increase in demand, which would push up the price of oil. An increase in inventories may reflect an increase in supply, which pushes down prices. The API report is published every Tuesday, and the EIA report the following day. Their results are usually similar, with a difference of 1% between them 75% of the time. The EIA data is considered more reliable because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide on member countries’ production quotas at biennial meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC countries, most notably Russia.
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.
