- The WTI price is depreciated in the midst of increasing concerns concerning the slowdown in global economic growth and the weakening of fuel demand.
- WTI is planned for a monthly drop of more than 15%, its clearest since November 2021.
- OPEC + can accelerate its planned production increases at the next May 5 meeting.
The West Texas Intermediate oil price (WTI) continues its decline for a third consecutive session, negotiating nearly $ 59.50 per barrel during Asian hours on Wednesday. The downward pressure on oil comes from growing fears of the weakening of global economic growth and the demand for fuel, widely triggered by unpredictable pricing policies of US President Donald Trump.
WTI is on the right track for a monthly loss greater than 15%, marking its most steep drop since November 2021. The climbing of the trade conflict between the two largest oil consumers in the world – the United States and China – has increased fears of recession. Trump's prices on imports have caused reprisal measures from China, deepening the commercial impasse and further attenuating economic prospects, according to a Reuters survey.
Economic feeling in the United States (United States) took another hit on Tuesday while the Conference Board consumer confidence index fell sharply at 86.0 in April from a 93.9 revised in March-its lowest level since April 2020. The decline reflects an increasing public concern about the impact of prices.
On the offer side, American gross inventories increased by 3.8 million barrels last week, according to market sources citing data from the American Petroleum Institute (API). The analysts interviewed by Reuters had planned a much smaller construction of around 400,000 barrels.
For the future, the organization of oil exporting countries and their allies, known as OPEC +, could consider accelerating its production increases scheduled for their next meeting on May 5. Sources have told Reuters that several member countries are likely to put pressure for additional production increases in June, which could add pressure on oil prices.
WTI oil faq
WTI oil is a type of crude oil sold on international markets. WTI means West Texas Intermediate, one of the three main types, including Brent and Dubai Brude. WTI is also called “light” and “sweet” because of its gravity and relatively low sulfur respectively. It is considered a high quality oil which is easily refined. It comes in the United States and distributed via Cushing Hub, which is considered “the crossroads of the world pipeline”. This is a reference for the oil market and the WTI price is frequently quoted in the media.
Like all assets, supply and demand are the main drivers of the WTI oil price. As such, global growth can be an engine of increased demand and vice versa for low global growth. Political instability, wars and sanctions can disrupt the offer and have an impact on prices. OPEC's decisions, a group of major oil producing countries, is another key engine in Price. The value of the US dollar influences the price of crude oil WTI because oil is mainly exchanged in US dollars, so a lower US dollar can make oil more affordable and vice versa.
Weekly petroleum stocks published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) have an impact on WTI oil prices. Changes in stocks reflect fluctuating supply and demand. If the data shows a drop in stocks, this may indicate increased demand, increasing the price of oil. Higher stocks can reflect the increased offer, lowering prices. The API report is published every Tuesday and EIA the next day. Their results are generally similar, falling to 1% from each other 75% of the time. EIA data is considered more reliable, as it is a government agency.
OPEC (Organization of Oil Exporting countries) is a group of 12 oil producing countries which collectively decide production quotas for member countries during meetings twice a year. Their decisions often have an impact on WTI oil prices. When OPEC decides to reduce quotas, it can tighten the offer, increasing oil prices. When the OPEC increases production, it has the opposite effect. OPEC + refers to an enlarged group which includes ten additional non -OPEC members, the most notable is Russia.
