Improving risk mood and renewed US Dollar strength make it difficult for XAU/USD to shake off the bearish pressure. The offshore oil producer is under some pressure after reporting its fourth-quarter results. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. W&T Offshore scored higher than 14% of companies evaluated by MarketBeat, and ranked 245th out of 259 stocks in the energy sector.
Recent News: WTI
- Brent crude oil prices also tumbled, closing at $9.12 a barrel on April 21, a far cry from the $70 a barrel that crude oil fetched at the beginning of the year.
- The supply-demand balance has always been the most important determinant factor in Brent Oil prices.
- The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price.
The supply-demand balance has always been the most important determinant factor in Brent Oil prices. In particular, the amount of production from the Middle East and the decisions of OPEC+ (OPEC countries and allied producers such as Russia) can directly affect prices. For example, a restriction or unexpected increase in production quotas creates a “supply shock” in the market and prices react rapidly upwards or downwards. Similarly, economic growth trends determine the course of oil demand. Rapid industrial growth in China, India and Southeast Asian countries has historically increased Brent demand, causing prices to rise. The impact of the COVID-19 pandemic hammered the oil industry in 2020, forcing U.S. oil prices to go negative for the first time on record.
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. W&T Offshore, Inc. shows resilience with strong liquidity and efficient drilling from its Cox acquisition, despite market volatility and lower oil prices. However, the price of WTI is deeply affected by the supply-demand dynamics in the American domestic market. For example, the occupancy rate of storage capacity in the US or capacity problems in pipelines often cause fluctuations in WTI prices. Brent Oil is more sensitive to global demand changes and especially to the expectations of the European and Asian markets because it covers a wider geography.
- In 2023, the U.S. imported about 8.51 million barrels per day of petroleum products from 86 countries.
- The same year, it exported about 10.15 million barrels of petroleum to 173 countries and three U.S. territories.
- Political instability, wars, and sanctions can disrupt supply and impact prices.
- These features facilitate refining processes and increase the quality of the fuel produced.
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Scores are calculated by averaging available category scores, with extra weight given to analysis and valuation. Select to analyze similar companies using key performance metrics; select up to 4 stocks. Germany is gaining strategic relevance as investors seek diversification away from U.S. policy and fiscal risks—helped by pro-growth reforms and industrial strength. There is nothing more exciting than finding a stock that has been mispriced by the market. Shares of this relatively small offshore oil driller rose dramatically, largely thanks to earnings. The previous decade was tough for W&T Offshore, as they battled to deleverage whilst enduring oil price booms and busts.
This causes Asian refineries to prefer crude oil types suitable for Brent. In addition, developed economies such as Japan and South Korea can focus on European crude oil in their refineries. Therefore, in addition to oil from the Middle East, Brent can also enter the Asian market quickly, especially when competitive prices are offered in the spot market. This flow, which occurs through tanker transportation, strengthens Brent’s global liquidity and price-setting power. The oil market has historically been extremely sensitive to geopolitical fluctuations. Brent Oil is also directly affected by global conflicts, embargoes, terrorist attacks or international political crises.
Brent oil takes its name from the first letters of five geological formations named Broom, Rannoch, Etive, Ness and Tarbert, discovered in 1971 and located off the coast of Scotland. Being light indicates that its density is low and its API (American Petroleum Institute) degree is high; while being sweet indicates that its sulfur content is relatively low. HOUSTON–(BUSINESS WIRE)–An independent Texas oil and gas producer is striking back against a group of insurance companies, which collectively are seeking $250 million in collateral beyond what the o… W&T is a small cap offshore oil and gas producers that recently broke below its 2020 pandemic lows. Back then, oil was $-37 as opposed to $63 now and the debt concerns were way more significant.
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WTI is a type of oil extracted from the inner regions of Alexander elder the USA, such as Texas and Oklahoma. Therefore, it is generally shipped to the US domestic market via land pipelines. In terms of characteristics, WTI is often considered a bit “sweeter” than Brent and has a higher API rating.
WTI Stock News Headlines
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As seen in the example of the Russia-Ukraine crisis, the closure or restriction of energy export channels can increase Europe’s demand for Brent oil, causing prices to fluctuate rapidly. Macroeconomic data and global geopolitical tensions also put pressure on Brent prices. For example, increases in the value of the US Dollar can reduce demand as it means oil becomes more expensive in terms of other currencies. Slowdowns in the Chinese or European economies can also result in lower global energy consumption, easing upward pressure on Brent.
Thankfully there is a light at the end of the proverbial tunnel once their seni… W&T Offshore’s significant debt reduction and positive cash flow make it an appealing investment, with potential for inorganic growth through acquisitions in the Gulf of Mexico. Please bear with us as we address this and restore your personalized lists.
In addition, crude oil types coming from North Africa are a suitable alternative for European refineries since their quality is similar to Brent. These features facilitate refining processes and increase the quality of the fuel produced. Therefore, Brent Oil is preferred in the production of high-demand products such as gasoline, diesel and aviation fuel. Especially in international oil trade, many contracts and financial derivative products are created by referencing Brent prices. Thus, investors have the opportunity to trade on an indicator from which they can obtain important signals not only about oil companies but also about the global economy.
What Happened to Oil Prices in 2020
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While WTI (West Texas Intermediate) serves as a reference primarily in the U.S., Brent is considered the global benchmark, with its prices heavily influenced by European and Asian market demands. The COVID-19 pandemic in 2020 notably disrupted cmc markets review oil prices, showing how vulnerable oil prices are to sudden shifts in global demand. In global markets, oil is known as a “benchmark” or “reference oil” in terms of pricing. One of the main reasons is the logistical advantages provided by its geographical location and the ease of access to world markets.