April 03, 2025
On Thursday, the prices of crude oil declined rapidly, the announcement of US President Donald Trump’s tariff and the decision to increase the OPEC+ oil output due to increasing concern about the demand view.
After the OPEC+ Cabinet talks, the team has decided to increase the 41,000 barrel oil output every day in May.
OPEC explained in a statement, “It has an enhancement of plans for May, in addition to two monthly increments.”
During the press, the West Texas Intermediate (WII) barrel prices per $ 66.90, which lost more than 5% on a daily basis.
WII oil faqs
WII Oil is a type of crude oil sold in the international market. West is one of the three main types including West Texas Intermediate, Brent and Dubai Crude. The WI is also referred to as “light” and “sweet” due to relatively low gravity and sulfur content, respectively. It is considered as a high quality oil that is easily refined. It is encouraged in the United States and is distributed through the Kushing Hub, which is considered “the world pipeline crosod”. It is a criteria for the oil market and the price of WI is often quoted in the media.
Like all assets, supply and demand are the main driver of WI oil prices. As such, global growth can be a driver against increased demand and weak global growth. Political instability, war and restrictions can disrupt the supply and impact prices. OPEC’s decision, a group of large oil producing countries, is another main driver of the price. The US dollar value affects the price of crude oil, since oil is mainly in the US dollar, so a weak US dollar can make oil more affordable and vice versa.
Weekly Oil Inventory Reports, published by the American Petroleum Institute (API) and Energy Information Agency (EIA), affect WII oil prices. Inventory changes reflect the supply and demand by fluctuating. If a drop of data inventors shows, it can indicate the demand for increasing the price of oil. Higher inventors can reflect increased supply, reduce prices. API reports were published every Tuesday and the next day of the EIA. Their results are usually the same, 75% of the period falls within 1% of each other. EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of Petroleum Exporting countries) is a group of 12 oil-producing countries that jointly decide the production quota in twice-year-annual meetings for member states. Their decisions often affect WII oil prices. When OPEC decides to reduce the quota, it can strengthen the supply, increase the price of oil. When OPEC grows 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.
