The implementation of US President Trump's tariffs on China has significantly affected the global oil market, putting pressure on the Australian dollar and contributing to a decline in West Texas Intermediate (WTI) US Crude Oil prices. As of today, the commodity is trading around the $72.00 mark, hovering near a one-month low. This drop follows a retracement slide experienced the previous day. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC+) remains steadfast in its strategy to gradually phase out production cuts, impacting oil market dynamics.
OPEC, a consortium of 12 oil-producing nations, plays a critical role in determining global oil production quotas. The decisions made by OPEC and its partners in OPEC+, which includes ten additional non-OPEC members such as Russia, are key drivers of oil prices worldwide. Their commitment to carefully adjusting production quotas aims to stabilize the market amidst fluctuating global demand.
Market analysts closely monitor weekly oil inventory reports from the American Petroleum Institute (API) and the Energy Information Administration (EIA), as these reports significantly influence WTI oil prices. The API releases its findings every Tuesday, followed by the EIA's more reliable government-issued data on Wednesday. These reports provide crucial insights into US oil stock levels, further informing price movements.
The value of the US Dollar also plays a pivotal role in determining WTI crude oil prices. A weaker US Dollar can make oil more affordable for holders of other currencies, potentially boosting demand and supporting prices. Conversely, a stronger dollar can have the opposite effect, making oil more expensive globally and weighing down prices.
President Trump's recent decision to delay tariffs on Canada and Mexico has alleviated some concerns over potential supply disruptions. This move has provided a modicum of relief to market participants wary of further volatility in oil prices resulting from geopolitical tensions.
Technical analysis reveals that the 100-day Simple Moving Average (SMA) serves as a crucial support level for WTI, situated near the $71.00 mark. This indicator aids traders and investors in identifying potential price movements and making informed trading decisions.