- The prices of oil prices remain dark because OPEC + has announced that it would accelerate the progress of 2.2 million Boussiers of production made since September 2022.
- OPEC + announced that it would increase oil production by 960,000 BPD from June.
- US-Chinese trade tensions have attenuated oil demand prospects.
West Texas Intermediate (WTI), Futures on Nymex, recovers a substantial part of the initial losses and rebounds of the intra -day hollow of $ 55.14 to almost $ 57.30 during European negotiation hours on Monday. The price of oil is still down by almost 1.5% compared to the fence price on Friday and should remain on the backfoot because OPEC + has decided to accelerate their objective to eliminate the production reductions of 2.2 million barrels per day (BPD) announced since September 2022.
The oil cartel has decided to relax the oil production cuts gradually by increasing production at a rate of 138,000 BPD each month from April and will reach the bar of 2.2 million BPD by September 2026. However, the cartel accelerated its pace almost three times to 411,000 BPD in May and increased it to 960,000 in June, reported Reuters. Technically, the price of underperform oil on a driving market in oil.
In addition, a high uncertainty about demand prospects in the face of prices announced by the President of the United States (United States), Donald Trump, the second day of April also aroused problems of oil demand.
President Trump said he could announce bilateral agreements this week, but the trade war with China is expected to last longer, while responding to journalists during the weekend. Although the growing hopes of the bilateral trade agreements of Washington indicate that fears of the prices offered by President Trump have reached a summit now, the confrontation between the two largest powers in the world will continue to keep investors on their guard.
Market experts have revised their gross domestic product forecasts (GDP) for China following a trade war with China. Since China is the largest oil importer in the world, an economic slowdown in the Asian giant attenuates the prospects for petroleum demand.
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.
