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- WTI crude oil fell below $81.00 as bullish momentum faded.
- US crude oil initially rose on Friday, but quickly fell to familiar levels.
- The US Energy Information Administration indicated that crude oil production in the United States reached new high levels in April.
West Texas Intermediate (WTI) crude rose to an eight-week high on Friday as oil prices rose broadly. willingness to take risks Crude oil prices rose, but investor sentiment slowed during the US market session, sending crude oil prices to their lowest levels for the day. The US Energy Information Administration noted that despite a slight increase in overall fossil fuel demand, gasoline demand fell more and the US continues to see near-term increases in total oil production.
Continued market hopes for increased overall demand for crude oil over the summer continue to be dashed by a difficult reality as consumer demand for fossil fuels consistently lags market expectations.
According to the U.S. Energy Information Administration, U.S. crude oil and petroleum product prices rose to their highest levels since December, but the increase in U.S. crude oil production, which also peaked in December at 13.25 million barrels per day in April, was more than enough to offset the decline in supplies. The EIA also noted an overall decline in consumer gasoline demand, which fell to 8.83 million barrels per day in April, the lowest level since February.
Technical forecast for West Texas Intermediate crude oil
US West Texas Intermediate crude oil recorded its highest level in eight weeks at $82.31 a barrel on Friday before retreating to the bearish zone in the last trading session of the week, concluding the week trying to reach the $81.00 level. WTI crude oil is moving under strong downward pressure from the supply zone above $81.50 per barrel.
Despite subdued intraday price action, daily candles remain trapped in a near-term consolidation zone as WTI struggles to hold on to the bullish zone north of the 200-day Exponential Moving Average (EMA) at $79.00.
WTI Crude Oil Hourly Chart
Daily chart of West Texas Intermediate crude oil
Frequently Asked Questions About West Texas Intermediate Crude Oil
West Texas Intermediate crude oil is a type of crude oil that is sold in global markets. WTI stands for West Texas Intermediate crude, and is one of the three main types including Brent and Dubai crude. WTI is also referred to as “light” and “sweet” due to its relatively low gravity and sulfur content, respectively. It is considered a high-quality oil that is easy to refine. It is sourced from the United States and distributed through the Cushing Hub, considered the “pipeline crossroads of the world.” It is a benchmark for the oil market and the WTI price is often cited in the media.
Like all assets, supply and demand are the main drivers of the price of WTI. 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 affect prices. Decisions by OPEC, a group of major oil-producing countries, are another major driver of the price. The value of the US dollar affects the price of WTI, as oil is mostly traded in US dollars, so a weak US dollar can make oil more affordable and vice versa.
Weekly oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) influence the price of WTI. Changes in inventories reflect fluctuations in supply and demand. If the data shows a decrease in inventories, it could indicate increased demand, which would push oil prices higher. Higher inventories could reflect increased supply, which would push prices lower. The API report is published every Tuesday and the EIA reports the following day. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 oil-producing countries that collectively decides production quotas for member countries at meetings held twice a year. Their decisions often affect WTI prices. When OPEC decides to cut its quotas, it can tighten supply, causing oil prices to rise. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, most notably Russia.
