WTI appreciates toward $77.50 ahead of EIA Oil Stocks Change report
- WTI prices halt its losing streak due to a drop in Weekly Crude Oil Stock in the previous week.
- EIA Crude Oil Stocks Change report is anticipated to show a 0.7 million-barrel increase for the week ending July 19.
- Israeli Prime Minister Benjamin Netanyahu will address US Congress, seeking to redirect American attention to the Middle East.
West Texas Intermediate (WTI) Oil price grapples to halt its four-day losing streak, trading around $77.40 per barrel during the European hours on Wednesday. The declining US crude inventories contribute support for the prices of the black Gold.
On Tuesday, the American Petroleum Institute (API) reported a drop of 3.9 million barrels in Weekly Crude Oil Stock for the week ending July 19, exceeding market expectations of a 2.47 million-barrel decrease. This follows a previous decline of 4.44 million barrels. The US Energy Information Administration’s (EIA) Crude Oil Stocks Change report, scheduled for Wednesday, is anticipated to show a 0.7 million-barrel increase for the same period.
However, crude Oil prices faced challenges during the Asian hours probably following a surge of optimism surrounding potential ceasefire negotiations between Israel and Hamas. Israeli Prime Minister Benjamin Netanyahu has hinted at a potential ceasefire agreement that could lead to the release of several hostages in Gaza.
Israeli Prime Minister Netanyahu is currently in Washington to address Congress. On Friday, Netanyahu will meet Republican presidential nominee Donald Trump at Trump's resort Mar-a-Lago, signaling an effort to improve ties between the two men, according to Reuters. US Vice President Kamala Harris will also meet with Netanyahu at the White House this week. However, Harris though will not preside over a joint session of Congress.
An aide of Harris told PTI, "We anticipate the Vice President will convey her view that it is time for the war to end in a way where Israel is secure, all hostages are released, the suffering of Palestinian civilians in Gaza ends, and the Palestinian people can enjoy their right to dignity, freedom, and self-determination. They will discuss efforts to reach an agreement on the ceasefire deal."
The rising odds of a Federal Reserve (Fed) rate cut in September put pressure on the US Dollar. A weaker Greenback could make Oil cheaper for buyers using other currencies, potentially contributing to demand for the commodity. Additionally, lower interest rates could stimulate economic activity in the United States, the world's largest Oil consumer, which may help support Oil prices.
Investors are expected to closely monitor the US Purchasing Managers Index (PMI) data, set to be released later in the North American session. Additionally, attention will be on the Gross Domestic Product (GDP) Annualized (Q2) figures, which will be released on Thursday. These reports are anticipated to offer fresh insights into the economic conditions in the United States.
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 13 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.
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