- WTI price extends upside near $76.85 in Tuesday’s early Asian session.
- Fears of wider Middle East conflict boost the WTI price.
- Investors await additional stimulus measures from Chinese officials.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $76.85 on Thursday. The WTI price extends the rally as escalating geopolitical tensions in the Middle East raised speculation that Israel may attack Iran’s oil infrastructure.
Oil prices soared on fears that Israel might be targeting Iran's oil industry in retaliation for Tehran's ballistic missile attack. Iran-backed Hezbollah launched rockets toward Israel's third-largest city, Haifa, early Monday. On the first anniversary of the Gaza war, Israel planned to ramp up ground incursions into southern Lebanon, causing the fear of wider war in the region, per Reuters.
"There is growing concerned that (the) conflict may continue to escalate - not only putting Iran's 3.4 mmbopd (million barrels of oil per day) of production at risk - but creating further disruptions to regional supply," noted analysts at Tudor, Pickering, Holt & Co.
Sluggish Chinese demand and dismal global economic data have dampened the outlook for oil markets this year. However, investors will closely watch additional policy measures from China’s top economic planning body on Tuesday after mainland China markets return from a week-long holiday. The lack of fresh measures or a smaller-than-expected package could also disappoint the market and weigh on the WTI price.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays bid toward 1.1000 after German data
EUR/USD holds its recovery toward 1.1000 in Tuesday's early European trading hours. The pair stays supported amid a broad US Dollar pullback and strong German Industrial Production data. The cautious mood, however, could cap the pair's rebound ahead of Fedspeak.
GBP/USD struggles below 1.3100 amid cautious mood
GBP/USD trades below 1.3100 in European trading on Tuesday, stalling its recovery from multi-week lows. A modest USD downtick lends support to the pair but China's economic woes-led dour mood checks gains. BoE- and Fed-speak are in focus.
Gold price struggles to lure buyers amid fading hopes for larger Fed rate cut
Gold price lacks any firm near-term direction amid a mixed fundamental backdrop. Diminishing odds for an aggressive Fed easing cap the upside for the XAU/USD.
Aptos price is poised for a rally following a retest of the support level
Aptos price extends its gains on Tuesday following last week's retest of its key support zone. On-chain data further support APT’s bullish outlook, as its open interest is rising and long-to-short ratio trades are above one, all hinting at a rally in the upcoming days.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.