- The WTI price depreciated after the API report showed a sharp increase in crude oil inventories in the US.
- Weekly inventories of crude oil increased to 9.04 million barrels in the previous week, the largest increase in one year.
- Crude oil prices can find support as the concerns about the supply intensify due to the escalation of geopolitical tensions in the Middle East.
The price of oil West Texas Intermediate (WTI) breaks a three -day streak, negotiating around $ 72.40 per barrel during the European hours on Wednesday. The fall follows the American Petroleum Institute (API) report that reveals a strong increase in crude oil inventories in the US.
The API reported an increase of 9.04 million barrels in the weekly inventories of crude oil for the week that ended on February 7, significantly exceeding the expected increase of 2.8 million barrels, the largest increase in one year.
The feeling of the market remains cautious due to the escalation of commercial tensions and general economic uncertainty. Concerns on the impact of steel and aluminum tariffs of the president of the United States, Donald Trump, who could interrupt oil drilling operations that depend on specialized steel not produced at the national level have grown.
However, crude oil prices can find support in the midst of growing concerns about the supply driven by geopolitical tensions in the Middle East. On Tuesday, Israeli prime minister, Benjamin Netanyahu, warned that the high fire would end and that Israel would resume the “intense fighting” in Gaza if Hamas does not release the hostages before noon on Saturday, according to the BBC. Meanwhile, the US president, Trump, urged Israel to break the fire if the hostages were not returned for the weekend.
Limiting further losses, concerns about Russian and Iranian oil supplies persist due to ongoing sanctions. The US measures imposed last month to tankers, producers and insurers have interrupted Russian oil shipments to China and India. In addition, new sanctions point to networks that facilitate Iranian oil exports to China as part of the renewed “maximum pressure” campaign of Trump.
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.
