- The WTI price advances around $ 64.65 in the Asian session on Tuesday.
- The hopes generated by the commercial conversations between the US and China and the geopolitical risks support the price of the WTI.
- OPEC and its partners have agreed to expand short -term oil production.
The West Texas Intermediate (WTI), the referent of the US crude oil, is quoted around $ 64.65 during the Asian negotiation hours on Tuesday. The price of the WTI rises to almost maximum seven weeks, promoted by a possible commercial and a weaker US dollar (USD). Investors expect news of commercial conversations between the US and China in London to obtain a new impulse.
Investors are optimistic about negotiations between the US and China, although no significant advances were announced after the first day of conversations. US President Donald Trump said conversations “should be very good.” Oil merchants have the hope of a positive result of negotiation, which could support global economic perspectives and increase oil demand. This, in turn, could underpin the price of WTI.
In addition, the persistent geopolitical tensions in the Middle East and the current war between Russia and Ukraine could increase the demand for crude oil. In Tuesday, Kyiv and Odesa were the subject of another Russian mass attack, which involved ballistic missiles and drones. Explosions were heard throughout the capital while the air defense systems attacked the objectives.
On the other hand, the last movement of the Organization of Petroleum Exporting Countries (OPEC) could limit the upward potential for the WTI. The OPEC and its partners have agreed to expand the production of short -term oil, with a planned increase of 411,000 barrels per day in July that is now expected to despite global prices.
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.
