Crude prices have been limited at the level of $ 72.00, but remain 12% above the May range.
The fears of growing tensions between Israel and Iran are limiting the downward attempts.
The Vice Prime Minister of Russia, Novak, is pressing OPEC+ to reconsider production increases.
The recoil in the crude oil prices on Monday found support on Tuesday, since the growing tensions in the Middle East revived the fears of an interruption of the oil supply, while Russia presses OPEC+ to reconsider more production increases.
The price of West Texas intermediate barrel bounced from the minimum of Monday about $ 68.00. The upward attempts have remained limited below the level of $ 72.00 so far, but even at 12% levels above the May negotiation range.
The fears of supply interruptions are supporting crude oil prices
The war in climbing between Israel and Iran is supporting oil prices. A new missile exchange tonight and the early departure of US President Trump of the G7 after calling a meeting of the National Security Council have increased concerns about a possible involvement of the US in the conflict, which could lead to interruptions in the supply and higher prices.
Beyond that, the Vice Prime Minister of Russia, Aleksander Novak, has urged OPEC+ to reverse his decision to increase crude oil production, since, according to him, global oil prices are not appropriate for most producers at this time.
In the economic calendar, the American Petroleum Institute (API) will publish the weekly oil stock report, which could have any impact on prices. In addition, it is expected that US retail sales have contracted in June, which could add pressure to the Fed to reduce interest rates in the coming months.
The Fed will publish its economic and monetary policy projections on Wednesday, with investors looking for indications of greater short -term monetary relief. Such scenario would support growth in the leading economy of the world and increase the demand for oil. The impact on crude oil prices would be positive.
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.
in the short term
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.
