.jpg)
- The price of West Texas Intermediate crude fell to $80.00 per barrel on Wednesday, and continues to move in an approximate range.
- The Energy Information Administration reports another increase in US barrel supplies on a weekly basis.
- Energy markets are still hopeful of a rise in demand in the summer.
West Texas Intermediate (WTI) crude fell back to $80.00 per barrel on Wednesday after the Energy Information Administration (EIA) announced another unexpected increase in US crude oil prices on a weekly basis. Stores The change, however, drove barrel traders who had hoped for a clear decline in US crude oil supplies out from under them.
According to the Energy Information Administration, the change in U.S. crude oil inventories accumulated an additional 3.591 million barrels of crude oil for the week ending June 21, well above expectations for a decline of 3 million barrels, outpacing the decline of 2.547 million barrels in the previous week. US crude oil markets shuddered after another build-up on a weekly basis, sending WTI back to the $80.00 level due to the reaction.
Energy markets are still holding on to hopes of higher demand for fossil fuels during the summer on the back of increased cooling costs, as well as the summer driving season. This comes after a faltering rise in Chinese crude oil demand that failed to materialise, as well as a US Memorial Day holiday driving season that also failed to make a meaningful dent in US crude oil supplies.
Technical forecast for West Texas Intermediate crude oil
WTI continues to trade in an approximate range between $80.00 and $81.50, with a huge supply zone keeping the bullish momentum faltering beyond $81.50. Intraday price action is mixed against the 200 hourly Exponential Moving Average (EMA) rising through the $80.00 handle.
Daily candles continue to be positioned around the $81.00 level, and continued consolidation opens the way for an upside towards the low side of the 200-day EMA at $78.91. The downward push will leave WTI crude oil offers vulnerable to further declines to the early June low of less than $73.00 per barrel.
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 oil is a type of crude oil that is sold in international markets. WTI stands for WTI, and is one of 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 and 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 price of WTI is frequently quoted 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 from 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 data shows a decline in inventories, this could indicate increased demand, leading to higher oil prices. High inventories can reflect increased supply, causing prices to fall. The API report is published every Tuesday and the EIA report the next day. Their results are usually similar, falling within 1% of each other 75% of the time. EIA data is 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.
