- WTI crude oil reports the greatest weekly loss since March 2023.
- The OPEC prepares to increase the offer by 411,000 barrels per day in July, relieving concerns about the supply
- The WTI is still supported by the psychological level of $ 64.00, but the decrease in tensions in the Middle East limits short -term profits.
The West Texas Intermediate (WTI) crude oil has fallen dramatically since it reached a maximum of $ 76.44 on Monday, with prices that have decreased more than $ 10.00 per barrel this week.
With losses in the last five sessions that exceed 12%, this marks the largest weekly fall since March 2023.
At the time of writing, the WTI is quoted below $ 65.00 per barrel, with prices pressed for the profits and a significant change in the geopolitical feeling.
The high fire between Israel and Iran remains while the OPEC prepares to increase the offer in July
Concerns about a possible interruption of the supply in the Ormuz Strait promoted the rally that had taken the WTI about $ 77.00. However, with tensions in the Middle East decreasing and the high fire between Israel and will be maintained, those concerns have decreased to a large extent.
According to a Reuters report that cites data from Goldman Sachs options, the market now assigns only 4% probability to an interruption of the supply, which leads merchants to set the WTI within a more stable range of $ 60–69 in the coming months.
Fundamentally, although the Energy Information Administration (EIA) reported a decrease greater than expected in US reserves on Wednesday, the impact of these data has been limited.
The organization of oil export countries (OPEC) is expected to increase production in 411,000 barrels per day in July. As a result, merchants remain cautious about the possibility of following upward prices, particularly in a macroeconomic environment where demand signals remain mixed.
WTI crude oil: technical perspective
From a technical perspective, the WTI has found support near the fibonacci setback of 38.2% of the fall from January to April in 64.18 $.
The immediate support is now at the psychological level of $ 64.00, with a downward movement opening the possibility of a new test of the simple mobile average (SMA) of 50 days in 63.35 $.
While the concerns about the supply are kept moderate, the rising momentum seems limited, with the 100 -day SMA providing short -term resistance around $ 65.45.
WTI crude oil daily graphics
Above that is the 50% setback at $ 67.08, followed by the 200 -day SMA at $ 68.29.
The Relative Force Index (RSI) is located just below the neutral brand of 50, currently in 46, pointing out a slight bearish bias.
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.
