- The WTI price rises slightly while investors capitalize the strong mass sale on Monday to cover short positions.
- President Trump warned that the US economy could slow down unless interest rates are immediately cut.
- The growing uncertainty about the US monetary policy feeds concerns about crude oil demand.
The price of oil West Texas Intermediate (WTI) recovers its recent losses from the previous session, quoting around $ 63.30 per barrel during the European hours on Tuesday. The increase in crude oil prices occurred when investors took advantage of the strong mass sale on Monday to cover short positions.
According to Reuters, Hiroyuki Kikukawa, Nissan Securities Investment, said: “Some short coverage arose after the strong mass sale on Monday.” Hiroyuki also pointed out that persistent concerns about a possible recession, driven by ongoing commercial tensions, will probably maintain the price of WTI within the range of 55–65 $ for now.
On Monday, US President Donald Trump reiterated his criticism of the president of the Federal Reserve, Jerome Powell, warning that the US economy could be slowed unless the interest rates are immediately cut immediately. His comments fueled the concerns about the independence of the Fed and added uncertainty about the US monetary policy.
“The growing unpredictability of the US monetary policy is expected to despite the financial markets and the economy in general, increasing the fears of a decrease in demand for crude oil,” the analysts said. A Reuters survey held on April 17 indicated that investors now see a probability close to 50% of a recession in the US within the next 12 months, largely driven by the impact of current tariff policies.
Meanwhile, developments in relations between the US and Iran could exert more pressure on oil prices. During the weekend, both nations agreed to begin to write a framework for a possible nuclear agreement. Any advance could relieve concerns about the supply, since Iran remains a key oil producer.
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.
