- The WTI price moves down about $ 66.40 in the first bars of the Asian session on Thursday.
- Crude inventories in the United States increased by 3,845 million barrels last week, according to EIA.
- Iran has officially suspended its cooperation with the OIEA.
The West Texas Intermediate (WTI), the referent of the US crude oil, is quoted around $ 66.40 during the first hours of Asian negotiation on Thursday. The price of the WTI decreases due to a surprise accumulation in the US oil supplies. Petroleum operators are caught with the OPEC+ meeting to decide the production policy of the group for August.
The US crude oil inventories increased unexpectedly last week, pointing out a weaker demand and undermining the WTI price. The weekly report of the Energy Information Administration (EIA) showed that crude oil reserves in the US for the week that ended on June 27 increased by 3,845 million barrels, compared to a drop of 5,836 million barrels in the previous week. The market consensus estimated that reserves would decrease by 2 million barrels.
An Iranian official declared that the Supreme National Security Council of Iran must approve any future inspection of the International Atomic Energy Agency (OIEA) of its nuclear facilities, according to Reuters. The government has accused the agency to support Western countries and justify the air attacks in Israel.
Oil operators will closely follow developments related to geopolitical risks in the Middle East. Any escalation signal in the region or interruption fears in the oil supply could boost the price of the short -term WTI.
The US Non -Agricultural Payroll (NFP) report on June on Thursday will be observed closely, since it could offer some clues about the time of interest rate cuts by the US Federal Reserve (FED) this year. A lower interest rates regime could boost economic activity and, therefore, increase oil demand, supporting the price of WTI.
WTI oil – frequent questions
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.
