- The price of the WTI could be seen as the decrease in tariff tensions between the US and China improves energy demand.
- The US and China advisors are ready to meet again to reach a final trade agreement.
- Iran would present a counterproposal for a nuclear agreement to the USA.
The price of oil West Texas Intermediate (WTI) remains stable at around $ 64.50 per barrel at the time of writing. The prices of crude oil can continue their winning streak for the fourth consecutive day, since a possible commercial agreement between the US and China relieves tariff tensions, which had affected the energy demand.
On Tuesday at 10:00 am in London, US and China advisors are ready to continue meeting on a second day. Commercial conversations will continue while the two largest economies in the world seek to expand from tariffs to the restrictions of rare earth elements, interruptions in the global supply chain and slower growth.
The Treasury Secretary, Scott Besent, said Monday’s meeting was good. Meanwhile, the secretary of Commerce, Howard Lutnick, described them as “fruitful”, increasing the expectations of progress in improving relations between the two countries.
Iran would offer a counterproposal for a nuclear agreement to the US, while President Trump said he is not ready to allow Iran to continue his uranium enrichment activities. However, the decrease in US sanctions on Iran, the third largest producer among the members of the Organization of Petroleum Exporting Countries (OPEC), would allow the country to export more oil, exerting down pressure on the global prices of crude oil.
OPEC+, including OPEC members and allies such as Russia, plan to reduce its last round of production cuts. “The perspective of new increases in the supply of OPEC continues to weigh on the market,” said Daniel Hynes, a senior strategist of raw materials in Anz, in a note cited by Reuters.
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.
