- The WTI we weakens as the increase in crude oil reserves in the US feeds concerns about the weak domestic demand.
- Crude oil stocks of the US EIA.U.
- The operators remain cautious about the concerns that the possible reinstatement of tariffs in the US could reduce the demand for fuel.
The price of oil West Texas Intermediate (WTI) stops its three -day winning streak, quoting around $ 66.00 per barrel during the first European hours on Thursday. The prices of crude oil depreciate as an increase in crude oil reserves in the US increases concerns about the weak demand of the United States (USA), the world’s largest oil consumer in the world.
The change in US oil stocks reported a surprise increase of 3,845 million barrels in the week ending on June 27, against market expectations of a decrease of 2.0 million barrels and a previous drop of 5,836m, according to data from the Petroleum State Report of the Energy Information Administration (EIA).
In addition, oil prices receive downward pressure by signs that the Organization of Petroleum Exporting Countries (OPEC) and its allies, such as Russia, known as OPEP+, will increase their production by 411,000 barrels per day (BPD) in their meeting this weekend, according to Reuters. This production increase will raise total gain to 1.78 million barrels per day in 2025, equivalent to more than 1.5% of world oil demand.
The operators adopt caution in the face of the possibility that tariffs are reinstated in the US, which could cause lower fuel demand. Uncertainty increases around the US commercial policy since the 90 -day break in the implementation of higher tariffs will end on July 9 without new commercial agreements with several large commercial partners, such as the European Union and Japan.
In addition, the PMI of Caixin Services of China fell to 50.6 in June from 51.1 in May, failing the market forecast of 51.0. The data indicated that the activity of the services sector in the largest oil importing country in the world grew at its slowest pace in nine months in June, since the demand was weakened and the new export orders decreased.
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.
