- The WTI price extends the rebound to a maximum of two weeks around $ 63.50 in the Asian session on Friday.
- Trump expressed optimism about reaching a commercial agreement with the EU.
- The US sanctions to Iran increase the concerns about the offer, promoting the price of WTI.
The West Texas Intermediate (WTI), the referent of the US crude oil, trades around $ 63.50 during Friday’s Asian session. The price of WTI advances towards a maximum of two weeks amid hope of a commercial agreement between the United States and the European Union and new US sanctions to Iran. The volume of operations is expected to be light on Good Friday.
The president of the United States, Donald Trump, and the Italian Prime Minister, Giorgia Meloni, met in Washington, pointing out the hope of resolving commercial disputes that have tensioned the relations between the US and Europe. “We are going to have very few problems to make a deal with Europe or any other person, because we have something that everyone wants,” Trump told reporters.
The new US sanctions to curb Iranian oil exports continue to raise concerns about the offer and increase the price of WTI. The statement noted that the US continues to aggressively sanction Iran under the ‘maximum pressure’ policy of the Trump era. While they will try to generate oil income to finance their destabilizing activities, the US will hold both Iran and all its sanctions evaders.
“The US continues to sanction Iran and imposing sanctions on Iranian oil buyers. The OPEC+ has also provided updates and guarantees to the market, stating that they continue to control with flexibility to cut the production if necessary,” said analysts of the Gelber and Associate Energy Consulting firm.
As for the data, the weekly report of the Energy Information Administration (EIA) showed that crude oil inventories in the US for the week that ended on April 11 increased by 515,000 barrels, compared to an increase of 2,553,000 barrels in the previous week. The market consensus estimated that inventories would increase by 400,000 barrels.
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.
