- The WTI price depreciates after the announcement of President Trump of new tariffs of up to 40% to 14 countries.
- OPEC+ decided to increase oil production by 548,000 barrels per day in August.
- Yemen’s hutis attacked a bulk vessel in the Red Sea, saying that the ship sank.
The price of oil West Texas Intermediate (WTI) loses ground after registering more than 2% profits in the previous session, quoting around $ 66.60 per barrel during the European hours on Tuesday. Crude oil prices fall as renewed tariff threats in the United States (USA) reinforce concerns about global oil demand.
The president of the USA, Donald Trump, renewed his threat of a 25% tax to imports from Japan and South Korea and shared a lot of other letters to world leaders warning about taxes as of August 1. Trump also imposed 25% rates to Malaysia, Kazakhstan and Tunisia, while South Africa would see a 30% tariff and Laos and Burma would face a 40% tax. Other nations affected by taxes included Indonesia with a 32%rate, Bangladés with 35%, and Thailand and Cambodia with 36%rights.
The organization of oil exporting countries and its allies, known as OPEP+, decided on Saturday to increase oil production by 548,000 barrels per day in August. The decision exceeds the previous oil increase of 411,000 BPD carried out three months ago and effectively reverses almost all volunteer cuts of 2.2 million BPDs previously implemented by the group. Reuters cited five familiar sources, saying that the oil group prepares to approve an increase of around 550,000 BPD for September when it meets on August 3.
However, the fall in oil prices can be limited due to the renewed geopolitical risks, after a second attack of Yemen’s hutis to a bulk ship in the Red Sea. The reports indicate that the ship sank, which generates concerns about possible interruptions on critical shipping routes. On Monday, a drone attack on a boat managed by Greeks left two crew members already injured two other disappeared.
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.
