- The price of oil seems vulnerable near the weekly minimum around $ 65.00 in the midst of global commercial nerves.
- The signals of an escalation in commercial tensions between the US and the EU could weigh on the price of oil.
- Operators reduce moderate bets of the Fed as the impact of Trump tariffs has begun to influence inflation.
The West Texas Intermediate (WTI), future in Nymex, is negotiated with caution around $ 65.70 during the Late Asian negotiation session on Wednesday. The price of oil ranges near the weekly minimum while investors remain uncertain on energy demand in the middle of the persistent global commercial tensions.
The announcement of reciprocal tariffs by the United States (USA) to its main commercial partners such as the European Union (EU), Japan, Canada, Mexico and South Korea, together with 17 more nations, has generated uncertainty about global commercial harmony.
The president of the US, Donald Trump, has imposed tariffs on 22 nations for not reaching a commercial agreement during the 90 -day break in reciprocal tariffs. Meanwhile, the EU has also prepared proportional countermeasures if it fails to reach an agreement with the US before the new deadline of August 1. The imposition of countermeasures by the EU to US imports could boost commercial tensions, since Trump has already warned that additional tariffs will increase in case of reprisals by any economy.
Meanwhile, inflationary pressures in the US are accelerating as importers begin to transfer the impact of tariffs on consumers, which has generated doubts about whether the Federal Reserve (FED) will reduce interest rates in the September policy meeting, a scenario that is unfavorable for the price of oil.
On Tuesday, the consumer price index (CPI) report for June showed that the prices of several products imported by the US grew drastically, which led to an acute increase in general inflation to 2.7% year -on -year, as expected.
Market experts have warned that current price pressures reflect an unusual effect of sector tariffs and the impact of additional tariffs announced by President Trump on nations has not yet leaked. This would allow Fed officials to request more time to assess the impact of tariffs on inflation.
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.
