- WTI oil has reported the largest weekly loss since March 2023.
- OPEC is preparing to raise the supply by an additional 411,000 barrels a day in July, soothing the fears of delivery
- WTI remains supported by a psychological level in the amount of USD 64.00, but relieving tensions in the Middle East limit the next profits.
Crude oil West Texas Intermediate (WTI) has fallen rapidly since the highest level of USD 76.44 on Monday, and prices have fallen this week by over USD 10.00 per barrel.
The losses over the past five sessions have increased above 12%, this means the largest week from March 2023.
At the time of writing, WTI trades below USD 65.00 per barrel, and prices exerted for exerting profits and a significant change in geopolitical moods.
Israel-Iran Byfire persists when OPEC is preparing to raise the supply in July
Fears of the potential disturbance of the supply in the Hormuz Strait were led by a rally, which pushed WTI near $ 77.00. However, in the case of tensions in the Middle East and arrest of the suspension of Israel-Iran weapons, these fears have largely subsided.
According to the Reuters report, in which, citing the Goldman Sachs option, the market now assigns only 4% likely to disturb the supply, leading traders to the price of WTI in a more stable range of 60–69 USD in the coming months.
Basically, while the Energy Information Administration (OIA) reported a larger one than the expected drop in reserves in the US on Wednesday, the impact of this data was circumscribed.
The organization of oil exporting countries (OPEC) is expected to raise production by an additional 411,000 barrels a day in July. As a result, traders are cautious about prosecution of higher prices, especially in the macro environment, in which the demand signals remain mixed.
WTI crude oil: Technical perspectives
From a technical point of view, WTI found support around 38.2% of fibonacci waste from January and April in April 64.18 USD.
Immediate support now results at the psychological level worth USD 64.00, with the movement lower, opens the potential of the 50-day rectangular movable (SMA) retail to 63.35 USD.
As long as the fears of deliveries remain suppressed, the rush of growth seems circumscribed, and the 100-day SMA provides a short-term resistance of approximately USD 65.45.
Daily chart of WTI oil
Above is 50% withdrawal to 67.08 USD, and then a 200-day SMA after 68.29 USD.
The relative strength indicator (RSI) follows just below the neutral mark 50, currently at 46, signaling a slight bearing prejudice.
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 destitute 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.
