- The WTI slides down at the beginning of a new negotiation week, although the fall lacks bassist conviction.
- Optimism about commercial conversations between the US and China acts as a tail wind for merchandise in the middle of a weaker USD.
- The breakdown of Friday through the barrier of 63.30 $ supports the prospects for the appearance of buyers in setback.
The prices of American crude oil West Texas Intermediate (WTI) begin the new week with a softer tone and erodes part of the strong profits from Friday to levels just above the mark of 64.00 $, or the highest since April 23. The merchandise is currently negotiated around the area of ​​$ 63.80, with a fall of more than 0.40% in the day, although the fall seems to be damping before the important commercial conversations between the US and China.
The main US officials, including Treasury Secretary Scott Besent and Commerce Secretary Howard Lutnick, will meet with the Vice Prime Chinese Minister He Lifeng in London for negotiations aimed at deactivating commercial disputes. This feeds hopes about a possible commercial agreement between the two largest economies in the world, which could support economic growth and increase the demand for fuel. In addition, the appearance of a new US dollar (USD) could act as a tail wind for crude oil prices.
The initial market reaction to the details of employment in the US, mostly better than expected, turns out to be ephemeral in the midst of concerns about the worsening of the US fiscal situation and bets that the Federal Reserve (Fed) could still reduce the indebted costs in 2025. This stops the USD’s bullisters to make aggressive bets and becomes another factor that should offer some factor that should offer some factor that should offer some factor that should offer some factor that should offer some factor that should offer some factor that should merchandise called in USD, which justifies some caution before positioning for deeper losses.
Meanwhile, investors seem to have digested Opec +’s decision of another large production increase for July 31, suggesting that corrective setback could be seen as a purchase opportunity and it is more likely to remain limited. Even from a technical perspective, the sustained breakdown of Friday through the offer zone of 63.20 -63.30 $ was seen as a key trigger for upward operators and validates the positive perspective in the absence of any relevant macroeconomic publication in the US that moves the market.
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.
