- The price of WTI is gaining pace up to around 63.25 USD in Wednesday’s early Asian session.
- The United States and China reduce 115%, supporting the price of WTI.
- According to API, oil inventory in the US increased by 4.287 million barrels last week.
West Texas Intermediate (WTI), an American oil reference point on Wednesday, around USD 63.25 on Wednesday. The price of WTI extends its position in connection with the relief of commercial tensions between the United States (USA) and China, which prompted traders to regain the chances of recession.
The US and China agreed at the weekend in Switzerland to lower the tariff rates by 115%. US President Donald Trump agreed to reduce additional tariffs imposed on Chinese import in April this year to 30% from 145%, and Chinese duties regarding US imports will be reduced to 10% from 125%. The lower tariff rate is effective for 90 days. The momentary lowering of US-china tariffs, the world’s largest oil consumers in the world, may soon raise the price of WTI.
The American Petroleum Institute’s weekly report (API) showed that the oil reserves in the US in the week ending on May 9 increased by 4.287 million barrels, compared to a decrease in 4.49 million barrels last week. The market consensus estimated that the shares would fall by 2.4 million barrels.
The organization of oil exporting countries and its allies (OPEC+) aims to raise oil exports in May and June, which may reduce black gold. OPEC has raised oil production more than previously expected from April, and its exit may raise by 411,000 barrels a day.
FAQ of WTI oil
WTI oil is a type of crude oil sold on international markets. WTI means West Texas Intermediate, one of the three main types, including Brent and Dubai oil. WTI is also referred to as “light” and “sweet” due to its relatively low gravity and sulfur content. It is considered high quality oil that can be easily refined. He comes from the United States and distributed through Cushing Hub, which is considered “the intersection of the world pipelines”. This is a reference point for the oil market, and the price of WTI is often cited in the media.
Like all assets, supply and demand are the key factors for the price of WTI oil. As such, global growth can be the driving force of increased demand and vice versa for penniless global growth. Political instability, wars and sanctions can interfere with supply and affect prices. OPEC decisions, groups of the main oil -producing countries, are another key driving force. The value of the American dollar affects the price of WTI oil, because oil is mainly traded in American dollars, which is why a weaker American dollar can make oil more accessible and vice versa.
Weekly reports with oil reserves published by the American Petroleum Institute (API) and the Energy Information Agency (EEA) affect the price of WTI oil. Changes in wrestling reflect the variable supply and demand. If the data shows a decrease in stocks, it may indicate increased demand by raising the price of oil. Higher supplies can reflect the increased supply by lowering prices. The API report is published every Tuesday, and EIA the next day. Their results are usually similar, at a distance of 1% 75% of time. The OEP data is considered more reliable because it is a government agency.
OPEC (organization of oil exporting countries) is a group of 12 pus producing nations, which together determine production amounts for member states at meetings twice a year. Their decisions often affect WTI oil prices. When OPEC decides to reduce the amounts, it can tighten supply by raising oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an extended group, which includes ten additional members outside OPEC, of whom Russia is most noteworthy.
