WTI hovers near $60.00, upside appears due to easing trade tensions
By: bitcoin ethereum news|2025/05/09 12:15:01
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WTI price steadies after surging nearly 4% on Thursday. Easing trade tensions between major Oil consumers provides support for the Oil. Oil prices face headwinds as OPEC+ signals plan to boost production. West Texas Intermediate (WTI) crude Oil price edges lower during Asian trading hours on Friday, trading near $59.80 per barrel after posting a nearly 4% gain in the previous session. The rally was fueled by easing trade tensions between major Oil consumers—the United States (US) and China—and the announcement of a “breakthrough” trade deal between the US and the United Kingdom. US Treasury Secretary Scott Bessent is scheduled to meet with China’s Vice Premier He Lifeng in Switzerland on May 10, aiming to address ongoing trade disputes that have dampened global crude Oil demand. In a separate development, US President Donald Trump and British Prime Minister Keir Starmer suggested that the United Kingdom (UK) has agreed to reduce tariffs on US imports to 1.8% from 5.1%. The US, in turn, cut tariffs on British automobiles while maintaining a 10% duty on most other goods. Despite the recent gains, Oil prices face significant headwinds. OPEC and its allies (OPEC+) are planning to increase Oil production, which may weigh on prices. According to a Reuters survey, OPEC’s total output declined slightly in April as lower production in Libya, Venezuela, and Iraq offset planned increases elsewhere. Meanwhile, US sanctions on two smaller Chinese refiners—accused of purchasing Iranian crude—have disrupted their operations, with sources indicating the refiners are now selling products under different names. This marks an escalation in Washington’s pressure campaign against Iran, as the US seeks to curtail Tehran’s Oil revenues and push for renewed nuclear negotiations. 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. Source: https://www.fxstreet.com/news/wti-maintains-position-near-6000-upside-appears-due-to-easing-trade-tensions-202505090332
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