Oil prices for West Texas Intermediate (WTI) were progressing on Monday, according to FXStreet data. WTI is trading at $70.75 per barrel, rising at $70.70 from its closing price on Friday.
Brent oil exchange rates (Brent crude) are also rising, trading at $74.60 from the price of $74.54 posted Friday.
WTI Oil FAQ
WTI oil is a type of crude oil sold in international markets. WTI stands for West Texas Intermediate, one of three main types, including Brent and Dubai crude oil. WTIs are also called “light” and “sweet” because each has a relatively low gravity and sulfur content. This is considered a high quality oil that is easily refined. It is sourced in the US and distributed through Cushing Hub, which is considered the “world's pipeline crossroads.” This is a benchmark in the oil market, and WTI prices are frequently cited in the media.
Like all assets, supply and demand are the main drivers of WTI oil prices. Therefore, global growth is responsible for increasing demand, and vice versa because global growth is weak. Political instability, war and sanctions can hinder supply prices and impacts. The decision of OPEC, a group of major oil producers, is another important factor in price. As oil is traded primarily in US dollars, the value of the US dollar affects the price of WTI crude oil. So weak US dollars 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) affect WTI oil prices. Changes in inventory reflect fluctuations in supply and demand. If the data shows a decline in inventory, it can indicate an increase in demand, boosting oil prices. The higher the inventory, the lower the price reflects the increase in supply. API reports are published every Tuesday, while EIA is published the following day. Their results are usually similar, within 1% of each other's time of 75%. EIA data is considered more reliable because it is a government agency.
OPEC (Oil Exporting Countries Organization) is a group of 12 oil producers who collectively determine the production quotas of member countries at a meeting of twice the annual year. Their decisions often affect the oil prices of WTIs. Once OPEC decides to cut its quota, it tightens supply and boosts oil prices. If OPEC increases production, the opposite effect is achieved. OPEC+ refers to an extended group that contains 10 non-OPEC members. The most notable of these is Russia.
(An automation tool was used to create this post.)
