- The WTI price rises to about $ 72.15 at the late Monday’s Asian session.
- The concern for a broader conflict between Iran and Israel that could interrupt supplies supports the price of WTI.
- The uncertainty about Trump’s tariffs could limit WTI’s bullish potential.
The West Texas Intermediate (WTI), the referent of the US crude oil, is being negotiated around $ 72.15 during Monday’s Asian negotiation hours. The WTI price extends the recovery at the highest level since February after Israel attacked two natural gas facilities in Iran, increasing the fears that a broader war in the region could interrupt supplies in the region.
The WTI price has risen since Friday after an Israeli attack to Iran. A senior commander said 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.
On the other hand, uncertainty about tariffs caused by US President Donald Trump could undermine the WTI price. Trump said he intends to send letters to dozens of US commercial partners in the next one or two weeks, establishing unilateral tariffs before the deadline of July 9 that came with his 90 -day pause.
Petroleum merchants will keep an eye on retail and industrial sales from China for May, which will be published later on Monday. If the reports show a weaker result of what was expected, this could weigh on black gold, since China is the second largest oil and gas consumer in the world.
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.
