- The WTI price extends its rebound about $ 70.60 in the Asian session on Tuesday.
- The ongoing conflict between Israel and Iran elevates the price of WTI.
- The US retail sales data will be the culminating point later on Tuesday.
The West Texas Intermediate (WTI), the referent of the US crude oil, is quoted around $ 70.60 during the Asian negotiation hours on Tuesday. The WTI price advances in the middle of the persistent geopolitical risk in the Middle East. Weekly inventories of crude oil from the American Petroleum Institute (API) will be published later on Tuesday.
An Israeli attack was aimed at Iran’s state station on Monday, while the head of the United Nations Nuclear Control Agency (UN) reported substantial damage to the largest enrichment installation of Uranium in Iran.
A senior commander declared on Saturday that Iran is considering closing the Ormuz Strait. The Strait transports around a fifth of the world’s oil to global markets, according to Goldman Sachs. A close closure could boost oil prices. The fears that a broader war in the region could interrupt the supplies continue to support the price of the WTI.
However, the hope of a decrease in geopolitical tensions in the Middle East could limit the bullish potential of black gold. The president of the United States, Donald Trump, said that Iran wants to talk about the decalmous of the conflict, helping to calm the fears that a prolonged war could wrap a region that produces around a third of the world crude.
Petroleum operators will be attentive to retail sales of US USA, which will be published later on Tuesday. If the report shows a stronger result than expected, this could promote the dollar and weigh on the price of the raw material called in the USD in the short term.
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.
