WTI rebounds to near $59.50 after Trump’s moderating remarks on China

WTI gains around 2.5% after losing more than 5.0% on Friday.
President Trump stated on Sunday that China’s economy “will be fine” and aims to “help China, not hurt it.”
Oil prices faced challenges as supply concerns eased after Trump announced the Gaza conflict was over.

Akhtar Faruqui FXStreet

West Texas Intermediate (WTI) Oil price recovers around 2.5% after losing more than 5.0% in the previous session, trading around $59.40 during the Asian hours on Monday. Crude Oil prices received support after United States (US) President Donald Trump shared some conciliatory remarks on Sunday, following Friday’s tariff threats on China. The renewed trade tensions between the world’s two largest economies weighed on global economic growth and Oil demand.

President Trump posted on Truth Social on Sunday, noting that China’s economy “will be fine” and that the US wants to “help China, not hurt it.” On Sunday, Trump said that there’s no need to meet China’s President Xi Jinping at the upcoming South Korea summit and threatened to impose 100% tariffs on Chinese imports. China also responded by warning to retaliate if Trump fails to back down on his threat to impose 100% tariffs on Chinese imports.

Oil prices also faced challenges amid easing supply concerns following Trump’s Sunday declaration that the Gaza conflict is over, ahead of hostage releases and his planned address to Israel’s parliament. Trump is set to receive a hero’s welcome in Israel’s parliament on Monday as the Gaza ceasefire he helped broker enters its fourth day, with the anticipated release of Israeli hostages and Palestinian prisoners marking cautious progress in the long-standing conflict, according to Reuters.

China's annual crude Oil imports advanced 3.9% in September as refineries operated at their highest utilization rates this year. China brought in 47.25 million metric tons of Oil in September, or the equivalent of 11.5 million barrels per day, according to data released by the General Administration of Customs on Monday.

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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.

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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