Oil prices surged this week amid the second round of US-Iran nuclear talks in Geneva. Both sides reported progress on broad principles, but Iran continues to reject Washington’s demand for zero uranium enrichment, while the US is pushing to expand talks beyond the nuclear file. During the talks, Iran’s Revolutionary Guard conducted live-fire drills in the Strait of Hormuz, partially closing the waterway that carries about 20% of global oil flows; This is the first such closure since the US military buildup began in the region. In contrast to the geopolitical bid, last week’s Energy Information Administration (EIA) data showed US crude inventories rose by 8.5 million barrels, the biggest weekly increase in a year, while the Organization of the Petroleum Exporting Countries and its allies (OPEC+) are leaning towards resuming production growth from April when the group meets on March 1.
Strong bullish daily candle reclaims the 200-day exponential moving average (EMA) near 62.43
On the daily chart, WTI opened Tuesday’s session near $62.20, rising 3.4% on the day. The rally brought the price back above the 200-day and 50-day EMAs, restoring a bullish alignment after several sessions of testing the 200-day level on either side. The move erased the previous session’s losses and pushed price action back into the upper half of the consolidation range it has held since the move back from early year highs in late January. The Stochastic Oscillator is stuck in the midrange zone, which shows that there is room for momentum to develop in either direction. Resistance is at $65.00 and the all-time high at $66.25; A break above will open the door to the $67.00 handle. Support is near the 200-day EMA at $62.45, with a failure exposing the 50-day EMA at $61.25.
wti daily chart
WTI Oil FAQs
WTI oil is a type of crude oil that is sold in international markets. WTI stands for West Texas Intermediate, which is one of three major types including Brent and Dubai crude. WTI is also called “light” and “sweet” due to its relatively low gravity and sulfur content, respectively. It is considered a high quality oil that can be easily refined. It is sourced in the United States and distributed through the Cushing Hub, considered the “Pipeline Crossroads of the World”. It is a benchmark for the oil market and the price of WTI is often quoted in the media.
Like all assets, supply and demand are the key drivers of the price of WTI oil. Thus, global growth can be a driver of rising demand and vice versa for weak global growth. Political instability, war and sanctions can disrupt supplies and impact prices. Decisions by OPEC, a group of major oil producing countries, are another major price driver. The value of the US dollar affects the price of WTI crude oil, as oil is primarily 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) influence the price of WTI oil. Changes in inventory reflect fluctuations in supply and demand. If the data shows a decline in inventories it could indicate increased demand, sending oil prices higher. Higher inventory may reflect increased supply, driving prices down. The API report is published every Tuesday and the EIA report the next day. Their results are generally similar, coming within 1% of each other 75% of the time. EIA data is considered more reliable because it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 oil producing countries that collectively set production quotas for member countries in twice-yearly meetings. Their decisions often impact WTI oil prices. When OPEC decides to reduce quotas, it could tighten supply, causing oil prices to rise. When OPEC increases production it has the opposite effect. OPEC+ refers to an expanded group that includes ten additional non-OPEC members, the most notable of which is Russia.
