- Crude oil markets eased for the third straight trading day.
- Monday sees further price declines in fossil fuel barrels.
- Production growth in the US is expected to continue to slow.
West Texas Intermediate (WTI) crude oil prices eased for the third consecutive session on Monday, beginning the new trading week with a retest of the $76 per barrel zone. Despite newly appointed President Donald Trump’s insistence that he will create a mandate that will prompt U.S. crude oil producers to increase output, growth in that exact space remains subdued as crude oil producers Energy companies focus on returning profits to investors rather than going bankrupt on behalf of the US government.
Despite lofty promises from the new US administration, major financial institutions are preparing for crude oil prices to continue to ease in the future. Median forecasts predict that WTI barrel offers will fall below $60 per barrel by the midpoint of President Donald Trump’s term. Global demand remains below lofty expectations set in 2023 and 2024, and investors are scrambling to back off their expectations for global energy demand that has so far failed to materialize, specifically in mainland China even though the country has perfectly fulfilled the general economic growth mandates established by the government, almost suspiciously.
Crude Oil Price Forecast
After spending most of the fourth quarter struggling in a choppy technical range around the $69.00 zone, WTI prices skyrocketed to begin the 2025 trading season, reaching just over $79.00 per barrel. US crude oil bids action has eased, capping gains and marking a three-day losing streak as price action retreats towards the 200-day EMA near $73.50.
Despite a short-term reversal into a higher low pattern, the lack of a sustained pullback and continued bullish momentum means that early 2025 bullish action could run out of runway and pull back to the lower side. The 50-day EMA still remains physically below the 200-day EMA, and the lack of a significant crossover of the two key moving averages could leave the bears open to the possibility of taking another leg down.
WTI daily chart
WTI Oil FAQs
WTI oil is a type of crude oil that is sold in international markets. WTI stands for West Texas Intermediate, one of the three main types that include Brent and Dubai crude. WTI is also known as “light” and “sweet” for its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easily refined. It is sourced in the United States and distributed through the Cushing facility, considered “the pipeline junction of the world.” It is a benchmark for the oil market and the price of WTI is frequently quoted 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 increased demand and vice versa in the case of weak global growth. Political instability, wars and sanctions can alter supply and impact prices. The decisions of OPEC, 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, as oil is primarily traded in US dollars, so a weaker Dollar can make oil more affordable and vice versa.
Weekly oil inventory reports 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 shows a decline in inventories, it may indicate an increase in demand, which would drive up the price of oil. An increase in inventories can reflect an increase in supply, which drives down prices. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, with a difference of 1% between them 75% of the time. EIA data is considered more reliable since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing nations that collectively decide member countries’ production quotas at biannual meetings. Their decisions often influence WTI oil prices. When OPEC decides to reduce quotas, it can restrict supply and drive up oil prices. When OPEC increases production, the opposite effect occurs. OPEC+ is an expanded group that includes ten other non-OPEC member countries, including Russia.
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.
