- The WTI struggles to capitalize on the upward movement of the previous day, exceeding a maximum of more than a week.
- The sustained purchase of USD is considered a key factor that acts as a wind against merchandise.
- Trump’s commercial optimism and warning on broad sanctions to Russia support oil prices.
West Texas Intermediate (WTI) crude oil prices (WTI) fell slightly during the Asian session on Tuesday and eroded part of the strong profits of the previous day, which exceeded a maximum of more than a week. The merchandise is currently negotiated just below $ 66.00, with a 0.40% drop in the day, although the fall seems to be supported.
A commercial agreement between the US and the European Union (EU) adds to recent optimism on an agreement between the US and Japan and relieves the worst fears of investors. In addition, the news of a possible extension of the commercial truce between the US and China lifted the hopes of an improvement in global economic activity and an increase in the demand for fuel, which, in turn, could continue to act as a tail wind for the prices of crude oil.
Meanwhile, the US president, Donald Trump, established a new period of 10 or 12 days for Russia to advance towards the end of the war in Ukraine. Trump warned of severe sanctions if Russia did not act and said that his administration would impose secondary tariffs of 100% to the countries that continue to buy Russian exports. This could impact Russia’s oil flows and could also support black liquid.
However, the bulls could refrain from opening aggressive bets in the middle of a US dollar (USD) in general stronger, which tends to undermine the demand for the merchandise called in USD. Investors could also choose to wait for the result of a two -day FOMC policy meeting on Wednesday before positioning themselves for a firm address. This, in turn, supports the idea of a certain short -term consolidation for oil prices.
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.
