Select Language

WTI inches lower to near $71.00 ahead of US presidential election

Breaking news

WTI inches lower to near $71.00 ahead of US presidential election

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2024.11.05 11:57
WTI inches lower to near $71.00 ahead of US presidential election

update 2024.11.05 11:57

  • Oil prices receive downward pressure as traders adopt caution ahead of US election results on Tuesday.
  • WTI prices rose more than 3% after OPEC+ postponed its planned production increase for December on Monday.
  • Oil demand may increase as China is expected to approve an additional stimulus package of more than 10 trillion yuan.

West Texas Intermediate (WTI) Oil price edges lower due to uncertainties surrounding the results of the US presidential election on Tuesday. The WTI price trades around $71.20 during the Asian hours after rising more than 3% on Monday, which could be attributed to OPEC+ coalition, delaying plans to hike production in December.

On Sunday, the OPEC+ alliance--which includes the Organization of the Petroleum Exporting Countries and its allies like Russia--agreed to extend its production cut of 2.2 million barrels per day (bpd) through December 2024, citing weak demand and rising supply outside the group.

Regarding the US presidential election, former President Donald Trump and Vice President Kamala Harris both predicted victory as they campaigned across Pennsylvania on Monday in the final, frantic day of an exceptionally close US presidential election.

The opinion polls show that Trump and Harris are virtually even. The final winner may not be known for days after Tuesday's vote. Trump has already indicated he may challenge any unfavorable result, as he did in 2020.

The Standing Committee of the National People's Congress (NPC) is meeting in China from November 4 to 8 and is expected to approve additional stimulus measures to support the slowing economy. Media reports suggest that the potential stimulus package could exceed 10 trillion yuan. Any new measures could positively impact Oil prices, as China is the world's largest Oil importer.

Oil prices may have struggled due to the fading likelihood of a significant rate cut by the Federal Reserve (Fed) in November. Lower borrowing costs could stimulate economic activity in the United States (US), the world's largest Oil consumer, potentially boosting oil demand and prices. However, markets expect a modest 25 basis point rate cut this week. The CME FedWatch Tool shows a 99.5% probability of a quarter-point rate cut by the Fed in November.

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.


Date

Created

 : 2024.11.05

Update

Last updated

 : 2024.11.05

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

FX option expiries for Nov 5 NY cut

FX option expiries for Nov 5 NY cut at 10:00 Eastern Time, via DTCC, can be found below.
New
update2024.11.05 14:24

Silver Price Forecast: XAG/USD remains steady around $32.50 ahead of US election

Silver price (XAG/USD) maintains its position around 32.50 during Asian trading hours on Tuesday as traders adopt caution ahead of the US presidential election.
New
update2024.11.05 13:57

AUD/NZD sticks to modest gains near one-week top, around 1.1030 area post-RBA

The AUD/NZD cross reverses an Asian session dip to the 1.0990 region and rallies to a one-week top on Tuesday in reaction to the upbeat Chinese data.
New
update2024.11.05 13:44

India Gold price today: Gold falls, according to FXStreet data

Gold prices fell in India on Tuesday, according to data compiled by FXStreet.
New
update2024.11.05 13:36

RBA's Bullock: Believe rates need to stay restrictive for time being

Reserve Bank of Australia (RBA) Governor Michele Bullock is speaking at the press conference, following the announcement of the November monetary policy decision on Tuesday.
New
update2024.11.05 13:35

Gold price drops to one-week low, downside seems limited amid US political uncertainty

Gold price (XAU/USD) attracts fresh sellers during the Asian session on Tuesday and drops to over a one-week low, around the $2,725-2,724 region, though the downside seems cushioned.
New
update2024.11.05 13:06

AUD/JPY holds positive ground as RBA leaves interest rate unchanged at 4.35%

The AUD/JPY cross gains traction to near 100.40 during the Asian trading hours on Tuesday.
New
update2024.11.05 12:56

USD/CAD hovers around 1.3900 due to market caution ahead of US presidential election

The USD/CAD pair maintains its position around 1.3900 during Tuesday's Asian session, as traders exercise caution amid heightened uncertainty over the US presidential election outcome.
New
update2024.11.05 12:52

USD/INR rises as equity outflows weigh on Indian Rupee

The Indian Rupee (INR) extends its downside on Tuesday after closing at a new all-time low in the previous session.
New
update2024.11.05 12:00

WTI inches lower to near $71.00 ahead of US presidential election

West Texas Intermediate (WTI) Oil price edges lower due to uncertainties surrounding the results of the US presidential election on Tuesday.
New
update2024.11.05 11:56

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel