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WTI price drifts lower to around $60.15 in Wednesday’s early Asian session.
OPEC+ is planning to increase production again in December, Reuters.
US crude inventories fell by 4 million barrels last week, the API said.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $60.15 during the early Asian trading hours on Wednesday. The WTI declines amid a potential plan by the Petroleum Exporting Countries and its allies (OPEC+) to raise output. Traders await the Energy Information Administration (EIA) crude oil stocks change report later on Wednesday.
OPEC+ is reportedly considering a modest production increase in December, four sources familiar with the talks told Reuters. The group is likely to agree on Sunday to increase December output targets by another 137,000 barrels per day (bpd). While the base scenario assumes restoring output to around 1.66 million bps, there is still no consensus on the pace of further expansion. The decision to increase oil output could weigh on the WTI in the near term.
“Rising OPEC+ output could help offset any curtailment to Russian barrels following US sanctions,” said Andrew Lipow, president of Lipow Oil Associates.
Data released by the American Petroleum Institute (API) on Tuesday showed that crude oil stockpiles in the US for the week ending October 24 fell by 4 million barrels compared to a decline of 2.98 million barrels in the previous week. Crude oil inventories in the US are so far showing a net loss of 6.4 million barrels for the year, according to Oilprice calculations of API data.
Oil traders will closely monitor the Federal Reserve (Fed) interest rate decision later on Wednesday. The Fed is widely anticipated to cut its benchmark interest rate by 25 basis points (bps) at the conclusion of its October meeting on Wednesday. This would bring the Federal Funds Rate target to 3.75%-4.00%. Lower interest rates generally weaken the US Dollar (USD) as it makes oil cheaper for foreign buyers, boosting global demand and lifting WTI prices.
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