WTI price declines to around $62.00 in Thursday’s early Asian session.
Fears of a global oil oversupply undermine the WTI price.
Oil inventories fell by 4.304 million barrels in the week ended May 30, according to the EIA.
Heightened geopolitical risks and expectations that Iran will reject a US nuclear deal might cap the WTI’s downside.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $62.00 during the Asian trading hours on Thursday. The WTI price edges lower as Saudi Arabia signals it may push for a large production increase, raising fears of a global oil oversupply.
On Saturday, the Organization of the Petroleum Exporting Countries and its allies (OPEC+) decided to increase their production again on Saturday. OPEC+ planned to raise production at a steady rate by 411,000 barrels per day (bpd) in July, following an increase in May and June.
Bloomberg reported that Saudi Arabia is open to additional crude production hikes in a bid to increase its market share, which is viewed as a strategy to reduce oil prices and punish overproducing OPEC+ members, such as Kazakhstan and Iraq. Concern about a global oil supply weighs on the WTI price.
US gasoline stocks swelled by 5.2 million barrels, the Energy Information Administration (EIA) reported. Analysts polled had expected a rise of 600,000 barrels. Meanwhile, US Crude oil inventories fell more than expected last week. The EIA weekly report showed crude oil stockpiles in the US for the week ending May 30 fell by 4.304 million barrels, compared to a decline of 2.795 million barrels in the previous week. The market consensus estimated that stocks would drop by 900,000 barrels.
On the other hand, doubts about a nuclear deal between the United States and Iran could help limit the WTI’s losses. Iranian Supreme Leader Ali Khamenei said that he doesn't think talks with the US will succeed, while US President Donald Trump stated that Tehran will face "something bad" if it doesn't quickly accept a US proposal over its nuclear program.
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