- The price of WTI is quoted flat around $ 64.50 in the Asian session on Monday.
- The High The Fire between Israel and Iran and the most supply perspective of the OPEC+ weigh on the price of WTI.
- OPEC+ is ready to increase August production by another 411,000 BPD.
The West Texas Intermediate (WTI), the referent of the US crude oil, is being negotiated around $ 64.50 during Monday’s Asian negotiation hours. The price of WTI is quoted in the middle of a relaxation of geopolitical tensions in the Middle East and the perspective of another increase in OPEC+ production in August.
The high fire between Israel and Iran reduces geopolitical risks in the Middle East, since investors expect a truce between both countries to reduce the risk of interruptions in the oil supply in the region. This, in turn, could drag the WTI down in the short term. The market has eliminated most of the geopolitical risk premium incorporated into the price after the high fire between Iran and Israel, said Ig market analyst Tony Sycamore.
The organization of oil exporting countries and its allies (OPEP+) said that the group was ready to increase production by 411,000 barrels per day in August, after increases in similar size production for May, June and July. The OPEC+ has a meeting scheduled on July 6, and this would be the fifth monthly increase since the group began to undo the production cuts in April.
However, China’s optimistic economic data could provide some support for black gold, since China is the second largest oil and gas consumer in the world. The data published on Monday showed that the Index of Purchasing Managers (PMI) Official Manufacturing of China rose to 49.7 in June compared to the previous 49.5. This figure was in line with the market consensus. Meanwhile, the NBS non -manufacturing PMI rose to 50.5 in June, compared to May 50 and 50.3 expected.
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.
