WTI price edges lower to near $61.80 in Friday’s early Asian session.
IEA expects oversupply to increase with OPEC output hike.
Weak US demand and oversupply fears weigh on the WTI price, but geopolitical risks might cap its downside.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $61.80 during the early Asian trading hours on Friday. The WTI declines amid concerns over possible softening of US demand and broad oversupply risks.
US crude oil stocks rose unexpectedly last week, indicating weaker demand and undermining the WTI price. Data released by the Energy Information Administration (EIA) on Wednesday showed that crude oil stockpiles in the US for the week ending September 5 climbed by 3.939 million barrels, compared to a rise of 2.415 million barrels in the previous week. The market consensus estimated that stocks would decline by 1.1 million barrels.
Additionally, the International Energy Agency (IEA) noted in its monthly report that global oil supply will rise more rapidly than expected this year due to planned output increases by the Organization of the Petroleum Exporting Countries and allies (OPEC+).
"Oil prices are falling today in response to bearish IEA headlines, which suggest massive oversupply on the oil market next year," said Carsten Fritsch, an analyst at Commerzbank.
On the other hand, ongoing geopolitical tensions in Europe and the Middle East might help limit the WTI’s losses. Israel on Tuesday launched a strike on Doha, Qatar, targeting the senior leadership of Hamas. Qatar said the attack by Israel violated international law and threatens to widen the conflict in the region, the source of about one-third of global oil supplies.
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