- WTI price edges fall on Monday’s Asian session to $ 60.30.
- Fear of economic uncertainty and stagnation triggers a price decrease in WTI.
- In May, OPEC+decided to increase crude oil production by 411,000 barrels per day.
West Texas Intermediate (WTI), a US crude oil criterion, is traded around $ 60.30 at an early Asian session on Monday. The WTI price has been falling to the lowest point since April 2021 in the midst of the fear that US President Donald Trump will push the US (USA) to the stagnation.
Traders are worried about an increasing trade war of trade from Trump’s global tariffs, which will sharpen economic growth and increase the fear of slowing down in economic activity both in the US and globally. This continues to weaken the WTI price. According to JPMorgan analysts, the tariffs that will come into force this week will probably push the US and the global economy into stagnation this year ”.
A surprise production increase by the OPEC+) organization of oil -exporting countries and allies contributes to the disadvantage of WTI. OPEC+has planned to increase the output, which aims to return to 411,000 barrels per day from 135,000 BPDs planned in May.
Petroleum traders will closely monitor the US Consumer Price Index (CPI) inflation data for March, which will be held on Thursday. Any cool inflation symptom in the US may focus on Greenback and provide some support to the commodity price in the near term in the near term.
WTI OIL FAQ
WTI oil is a type of crude oil sold in international markets. WTI represents West Texas Intermediate, one of the three main species, including Brent and Dubai crude oil. WTI is also called “Light” and “Sweet” due to its low gravity and sulfur content, respectively. It is considered an easily refined high quality oil. It is supplied in the United States and is distributed through Cushing Hub, which is accepted as the “Pipeline of the World”. It is a criterion for the oil market and the price of WTI is often quoted in the media.
Like all beings, supply and demand are the main driving forces of WTI oil price. Therefore, global growth may be the driving force of increasing demand and can be the opposite for weak global growth. Political instability, wars and sanctions may be supply and influence. The decisions of OPEC, a group of large oil -producing country, are another important driving force of the price. The value of the US dollar affects the price of WTI crude oil, because the oil is mainly traded as US dollar, so a weaker US dollar can make oil more affordable and vice versa.
The weekly oil inventory reports published by the American Oil Institute (API) and Energy Information Agency (EIA) affect WTI oil price. Changes in inventories reflect the fluctuating supply and demand. If the data shows a decrease in stocks, it may show increasing demand and increase the price of oil. Higher stocks can reflect the increasing supply and reduce prices. API’s report is published every Tuesday and the next day by EIA. The results are usually similar, falling to 1% of 75% of the time. Since it is a state institution, EIA data is considered more reliable.
OPEC (Organization of Oil Export countries) is a group of 12 oil -producing countries that decide on production quotas for member states twice a year. Decisions usually affect WTI oil prices. When OPEC decides to lower quotas, it can tighten the supply by increasing oil prices. When OPEC increases production, it has the opposite effect. The OPEC+refers to a expanded group containing the most remarkable Russia, which is the ten extra OPEC member.
