- The WTI price drifts at nearly $ 60.75 during the first Asian session on Friday.
- Oil stocks increased by 1.328 million barrels during the week ended on May 16, according to EIA.
- The United States and Iran will hold new nuclear conferences on Friday.
West Texas Intermediate (WTI), the American reference of crude oil, is negotiated about $ 60.75 during hours of Asian negotiations on Friday. WTI prices edges are in the midst of concerns that global supply could exceed the growth in demand.
The organization of oil exporting countries and its allies (OPEC +) planned to stimulate oil production to regain market share, which could cap the WTI price. OPEC + has increased oil production more than expected since April, its May production should increase by 411,000 barrels per day. OPEC leaders are also considering a similar increase in July and could bring up to 2.2 million barrels per day (BPD) of the market by November, Reuters earlier.
The American weekly report Information Information Administration (EIA) has shown that stocks of crude oil in the United States for the week ending on May 16 increased by 1.328 million barrels, against 3.454 million barrels the previous week. The market consensus estimated that shares would drop by 1.85 million barrels.
On Tuesday, the United States obtained new information suggesting that Israel is preparing to conclude Iranian nuclear installations, even though US President Donald Trump continued a diplomatic agreement with Tehran. It is not clear that Israeli leaders have made the final decision to carry out strikes, said CNN, quoting unnamed officials.
An attack by Israel would hinder any progress in these negotiations and contribute to tension in the Middle East, which provides approximately a third of world oil. Merchants will look closely at the next round of Iran-Us talks, which will take place on Friday in Rome. Any sign of progress in nuclear talks could weigh on the WTI price.
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.
