- The price of WTI drops to around $ 61.10 in the Asian session on Thursday.
- USA and they will carry out nuclear conversations, which weighs on the price of WTI.
- Petroleum inventories increased by 1,328 million barrels in the week that ended on May 16, according to EIA.
The West Texas Intermediate (WTI), the referent of American crude oil, quotes around $ 61.10 during Thursday’s Asian negotiation hours. The price of WTI drops after the report that a new round of nuclear conversations between the United States and Iran would take place later this week.
On Tuesday, the US obtained new information that suggests that Israel is preparing to attack Iranian nuclear facilities, even when US President Donald Trump has been looking for a diplomatic agreement with Tehran. It is not clear if Israeli leaders have made a final decision to carry out the attacks, CNN said, citing unidentified officials.
An attack by Israel would hinder any progress in these negotiations and contribute to tension in the Middle East, which provides approximately one third of world oil. The next round of conversations between Iran and the US will take place on Friday in Rome. Any sign of progress in nuclear conversations could limit the bullish potential of the WTI price.
Regarding the data, the weekly report of the US Energy Information Administration (EIA) showed that crude oil reserves in the US for the week that ended on May 16 increased by 1,328 million barrels, compared to an increase of 3,454 million barrels in the previous week. The market consensus estimated that the reserves would fall into 1.85 million barrels.
Petroleum operators will be attentive to US economic data that will be published later on Thursday, including the Purchase Management Index (PMI) of Advanced S&P, the National Activity Index of the Chicago Fed, the initial applications of unemployment subsidy and the sales reports of existing housing. Negative readings could exert some sale pressure on the dollar and raise the price of raw materials called the USD in the short term.
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.
