WTI hovers around $63.00 ahead of US tariffs on India
- WTI price steadies as traders await the imposition of US tariffs on India.
- The US is set to raise tariffs on Indian exports to 50% from 25% at 04:01 GMT on Wednesday.
- Russia lifted August crude exports from western ports by 200,000 bpd versus the initial plan.
West Texas Intermediate (WTI) Oil price moves little after registering more than 2% decline in the previous session, trading around $63.10 per troy ounce during the Asian hours on Wednesday. Crude Oil prices remain steady as traders adopt caution ahead of new United States (US) tariffs on India, the world’s third-largest crude importer.
The United States is set to impose additional tariffs of 25% on Indian exports at 04:01 GMT on Wednesday, in response to its Oil purchases from Russia. The tariffs will reach 50% overall and among the highest levied by Washington.
Markets are weighing the potential demand effects after Indian refiners resumed Russian crude purchases for September and October. Indian refiners reduced their Russian Oil purchases for a brief period, prompted by US tariffs and EU sanctions.
Meanwhile, Russia and Ukraine have intensified strikes on each other’s energy infrastructure. Following last week’s attacks. Russia raised its August crude export plan from western ports by 200,000 barrels per day compared with the initial schedule, Reuters reported on Tuesday, citing three sources.
Traders monitor further developments over the Federal Reserve’s independence. President Trump said on Tuesday that he was ready for a legal fight with Fed Governor Lisa Cook after he moved to oust her from her post over falsified mortgage documents, per Bloomberg.
American Petroleum Institute (API) data showed US Weekly Crude Oil Stock fell nearly 1 million barrels, undershooting expectations for a 1.7 million-barrel draw. The previous decline was 2.4 million barrels.
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.
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