- The price of oil rises to about $ 61.30 in NYMEX in the expectations that the commercial war will be limited between the US and China.
- The president of the USA, Trump, has increased additional tariffs to China to 145%.
- US Hasters confirms a positive development in commercial conversations with the EU.
The West Texas Intermediate (WTI), futures in Nymex, rises to about 61.30 $ during negotiation hours in North America on Monday. The price of oil wins as the fears of a global commercial war have decreased. Investors expect the commercial war to remain confined between the United States (USA) and China.
The financial market participants have become confident that the commercial war will be less disruptive after the US President Donald Trump announced a 90 -day break in the execution of reciprocal tariffs on all its commercial partners, except China. In addition, the US National Economic Council (NEC), Kevin Hasett, said in an interview with Fox Business Network that we are making “enormous progress” in tariff conversations with the European Union (EU).
Last week, Trump kept the tariffs on China and increased them to 145%, including tariffs on fentanyl, since the latter retaliates against their reciprocal tariffs. Similarly, China has also increased the additional tax on the US to 125% as a measure of counteracting the impact of Trump tariffs. Beijing already warned that it will do what is necessary to “safeguard your rights and interests.”
Although the least disruptive commercial war will have a moderate impact on the oil demand prospects compared to what the market participants had previously anticipated, it will continue to be uncertain since China is the largest energy importer in the world. The oil demand will remain weak if the Chinese economy faces a deceleration due to a struggle of reciprocal tariffs with the USA.
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.
