- The WTI price rises to about $ 65.00 in Friday’s Asian session.
- The inventories of crude oil in the United States fell last week, the EIA said.
- The reduction of supply risk in the Middle East could limit the wi’s bullish potential.
The West Texas Intermediate (WTI), the referent of the US crude oil, is quoted around $ 65.00 during Thursday’s Asian negotiation hours. The WTI price advances slightly as crude oil inventories fell more than expected. However, the decrease in tensions in the Middle East could limit the bullish potential of the WTI price.
The oil stocks in the US decreased due to greater demand at the beginning of the summer driving season. The Weekly Report of the US Energy Information Administration (EIA) showed that crude oil reserves in the US for the week that ended on June 20 fell into 5,836 million barrels, compared to a fall of 11,473 million barrels in the previous week. The market consensus estimated that stocks would decrease by 600,000 barrels.
In addition, the weakening of the dollar provides some support to the price of the raw material called in USD, since it makes oil less expensive for holders of other currencies. The president of the United States, Donald Trump, was considering selecting the next president of the Federal Reserve (Fed) soon, which fed new bets on feat cuts in the US.
The high fire between Israel and Iran relieves geopolitical tensions 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 undermine the price of black gold in the short term. “With the announcement of a high fire, President Trump ended the twelve -day war between Israel and Iran after successfully executing a scalar strategy to descale,” said Helima Croft, head of global raw material strategy at RBC Capital Markets.
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.
