- The price of WTI loses impulse about $ 65.40 in the first bars of the Asian session on Wednesday.
- Renewed commercial tensions weigh on the oil demand perspective.
- The inventories of crude oil in the United States fell into 577,000 barrels last week, according to the API.
The West Texas Intermediate (WTI), the referent of the US crude oil, is quoted around $ 65.40 during the first hours of Asian negotiation on Wednesday. The WTI slides down as the tariff policies of US President Trump generate new concerns about the global fuel demand. Merchants prepare for the publication of the Weekly Report of Crude Petroleum Inventories of the US Energy Information Administration (EIA) later on Wednesday.
Merchants are concerned that Trump’s tariff policies lead to a slower global economic growth and a reduction in energy demand, which could exert some selling pressure on the price of WTI. Trump declared that reciprocal tariffs will increase on August 1 for business partners who have not reached a commercial agreement with the USA at the beginning of this week, Trump had threatened with a 30% tariff on imports of the European Union (EU) if an agreement was not reached.
In addition, concerns about a growing excess oil supply to globally could contribute to the decline of the WTI. The Iraqi government has officially resumed crude oil exports from the Kurdistan region after more than two years of pause, in a movement that is expected to relieve tensions between Baghdad and Erbil and increase the national export volumes. The Kurdistan hopes to supply the Iraq crude market 230,000 barrels per day (BPD) of crude oil once exports resume. The prospects for greater crude oil exports from Iraq could increase the global oil offer and undermine the short -term WTI price.
The US crude oil inventories fell last week, which could provide some support to the WTI. The weekly inventories of crude oil inventories of the American Petroleum Institute (API) showed that crude oil reserves in the US for the week that ended on July 18 fell into 577,000 barrels, compared to an increase of 19.1 million barrels in the previous week. So far this year, crude oil inventories have increased by 11 million barrels, according to Oilprice calculations based on API data.
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.
