- WTI crude oil is quoted about $ 63.06, with an increase of almost 2% intradic on Tuesday.
- Forest fires in Canada interrupt 350,000 barrels per day of oil production, feeding concerns about the offer.
- The conflict in climbing between Russia and Ukraine and the stagnant conversations between Iran and the US maintain the adjusted oil market.
West Texas Intermediate (WTI) crude oil prices continue their upward career on Tuesday, marking the second day of profits. At the time of writing, the WTI is near the maximum of Monday, quoting around $ 63,06 per barrel, which reflects an increase of almost 2% in the day. The rebound reflects a mixture of interruptions in Canadian production, growing geopolitical tensions and a weaker US dollar (USD), all of which are providing a favorable context for oil bullies.
Forest fires in Alberta have closed about 350,000 barrels per day of oil production, equivalent to around 7% of the total production of the province. Although it is not a massive blow to the global offer, the interruption is significant enough to add fuel to the current oil price rebound. Temporary closures, caused by security concerns near Bituminous Arenas key sites, are produced at a time when markets are already nervous about geopolitical tensions.
The ongoing conflict between Russia and Ukraine has intensified with recent drones to Russian aerodromes, followed by retaliation attacks in Kyiv. These developments have revived the fears of possible interruptions in Russian oil infrastructure. On Monday, Russia and Ukraine celebrated their second round of direct peace talks after a strong escalation in hostilities the day before, but the discussions ended without significant advances.
Meanwhile, mixed signs of nuclear negotiations between Iran and the US have also kept the market participants in tension. An Iranian diplomat said Tehran is prepared to reject an US proposal aimed at solving the nuclear stagnation of decades. Although the fifth round of conversations in Rome last month achieved some progress, the panorama remains uncertain, limiting the possible return of Iranian barrels sanctioned to global markets.
Adding to the bullish tone, an American dollar in general weaker is helping to raise the prices of raw materials in general. A softer dollar makes assets called in US dollar, such as crude oil, more affordable for foreign buyers, thus increasing demand and further supporting the prices of the short -term WTI.
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.
