WTI trades higher above $61.00 on diminishing fears of global trade war – Crypto News – Crypto News
Connect with us
WTI remains subdued around $70.00 amid concerns over global economic growth, fuel demand WTI remains subdued around $70.00 amid concerns over global economic growth, fuel demand

others

WTI trades higher above $61.00 on diminishing fears of global trade war – Crypto News

Published

3 months ago

on

  • The Oil price rises to near $61.30 on NYMEX on expectations that the trade war will be limited between the US and China.
  • US President Trump has increased additional tariffs on China to 145%.
  • US Hassett confirms a positive development in trade talks with the EU.

West Texas Intermediate (WTI), futures on NYMEX, rises to near $61.30 during North American trading hours on Monday. The Oil price gains as fears of a global trade war have diminished. Investors expect that the trade war will remain confined between the United States (US) and China.

Financial market participants have become confident of a less-disruptive trade war after US President Donald Trump announced a 90-day pause in executing reciprocal tariffs on all of its trading partners, except China. Additionally, US National Economic Council (NEC) Kevin Hassett said in an interview with Fox Business Network that they are making “enormous progress” on tariff talks with the European Union (EU).

Last week, Trump kept tariffs on China and raised them to 145%, including Fentanyl duty, as retaliation against his reciprocal tariffs. Similarly, China has also increased additional levy on the US to 125% as a countermeasure to offset the impact of Trump’s tariffs. Beijing warned that it will do anything to “safeguard its rights and interests.”

Though the less-disruptive trade war will have a moderate impact on the Oil demand outlook compared to what market participants had anticipated earlier, it will remain uncertain as China is the largest importer of energy in the world. The demand for Oil will remain sluggish if the Chinese economy faces a slowdown due to a tit-for-tat tariff fight with the US.

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.

 

Related Topics:
Continue Reading

Trending