- The WTI price increases due to growing optimism on a potential softening of tensions between the United States and China.
- Trump said possible trade agreements with India, Japan and South Korea while expressing optimism about solving problems with China.
- The prices of the crude find support because the opening momentum is strengthened after Trump's firm warning against secondary sanctions against countries that import Iranian oil.
West Texas Intermediate (WTI) Prix du Petrolement Raw Prolonged Gains for a second consecutive session, negotiating nearly $ 59.40 per barrel during Asian negotiation hours on Friday. The rise in oil prices was supported by growing optimism on a potential relaxation of tensions between the United States and China, the two largest consumers of oil in the world.
The feeling of the market has improved after US President Donald Trump indicated the possibility of future trade agreements with India, Japan and South Korea, while expressing the hope of progress in resolution of disputes with China. According to Bloomberg, China plans to resume commercial negotiations, recognizing American awareness but insists that the concerns related to the price – the main source of friction – must be treated.
The bullish momentum was still fed by Trump's severe warning against secondary sanctions against any country that buys Iranian oil. Trump said all of these purchases should stop immediately and warned that any entity continuing to buy Iranian oil or petrochemical products would be subject to American sanctions. “They will not be allowed to do business with the United States of America in any way, in form or form,” published Trump on Truth on Thursday.
These comments occurred after the United States has postponed its last series of nuclear talks with Iran, which was scheduled for Saturday in Rome. A senior Iranian official told Reuters that a new date would be determined on the basis of the American approach in the future.
Despite recent earnings, WTI remains on the right track for a weekly loss of around 5%, weighed down by persistent commercial uncertainties, lower demand signals after contraction of American GDP and the most serious slowdown in China in more than two years.
Adding to the lower perspectives, reports indicate that Saudi Arabia has transmitted to the allies and the stakeholders of the industry that it is not inclined to support prices with other production decreases and is ready to endure an extended period of lower prices. This fueled expectations that OPEC + could announce an increase in production at its next meeting on May 5.
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.
