- The WTI rises in the midst of new sanctions related to Iran that point to an independent Chinese refining.
- Oil prices could obtain greater support as OPEC+ implements a new production cuts plan for seven member nations.
- Geopolitical risk premiums on oil increase as Israel launches a new terrestrial operation in Gaza.
The price of oil West Texas Intermediate (WTI) remains firm for third consecutive session, quoting around $ 68,40 per barrel during the Asian hours of Friday. Oil prices are still on their way to their second consecutive weekly increase, driven by new US sanctions (USA) to Iran.
On Thursday, the US Treasury imposed new sanctions related to Iran, pointing to an independent Chinese refining together with other entities and ships involved in the Iranian crude oil supply to China. Anz Bank analysts, cited by Reuters, anticipate a reduction of 1 million barrels per day (BPD) in Iranian crude oil exports due to stricter sanctions. Meanwhile, the Kpler ship tracking service estimated that Iran’s crude oil exports exceeded 1.8 million BPD in February, but warned that sanctions could obscure real figures.
In addition, oil prices could find greater support as OPEC+, the organization of oil exporting countries, and its allies implement a new plan for seven members to reduce production, decreasing production by 189,000–435,000 BPD every month until June 2026. Although Kazakhstan, Iraq and Russia are expected to contribute to these reductions, the production plans for next year could Compensate the impact.
Earlier this month, the OPEC+ confirmed that eight of its members would increase production by 138,000 BPD per month from April. This movement reverts part of the 5.85 million BPD in production cuts that have been gradually implemented since 2022 to stabilize the market.
Petroleum prices are also supported by geopolitical risk premiums. Israel has launched a new terrestrial operation in Gaza, while the US continues with air attacks against the huti rebels backed by Iran in Yemen. Meanwhile, the spokeswoman of the Ministry of Foreign Affairs of Russia, Maria Zakharova, declared that Ukraine had violated a ceasefire proposed on the energy infrastructure by attacking a Russian oil tank.
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.
