West Texas Intermediate (WTI) crude oil experienced a marginal increase in early European trading on Tuesday, reaching $60.85 per barrel, a slight gain from Monday’s closing price of $60.77. Brent crude also saw a modest rise, trading at $64.28, up from $64.26 on Monday.
WTI, a benchmark crude oil traded on international markets, is characterized as “light” and “sweet” due to its low gravity and sulfur content, respectively, making it easily refined. Primarily sourced in the United States and distributed through the Cushing, Oklahoma hub, a critical pipeline intersection, WTI’s price is influenced by fundamental supply and demand dynamics.
Global economic growth, geopolitical events (instability, wars, sanctions), and the production decisions of the Organization of the Petroleum Exporting Countries (OPEC) significantly impact WTI prices. The value of the U.S. dollar also plays a role, as oil is predominantly traded in USD.
Weekly inventory reports from the American Petroleum Institute (API) and the Energy Information Administration (EIA) provide insights into supply and demand fluctuations. Declining inventories typically indicate increased demand and rising prices, while higher inventories suggest increased supply and potentially lower prices. The EIA data is generally considered more reliable due to its governmental source.
OPEC’s production quota decisions, made during bi-annual meetings, directly influence WTI prices. Reduced quotas can tighten supply and increase prices, while increased production can have the opposite effect. The OPEC+ alliance, which includes non-OPEC members like Russia, further amplifies the impact of production decisions on the global oil market.
