WTI recovers to above $65.50 as US crude inventories drop

• WTI price rebounds to around $65.65 in Wednesday’s early Asian session. 

• US crude oil inventories fell by 4.2 million barrels last week, said API. 

• Rising OPEC+ supply might cap the WTI’s upside. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $65.65 during the early Asian trading hours on Tuesday. The WTI recovers some lost ground after the American Petroleum Institute (API) showed US crude oil inventories fell last week. Oil traders brace for the US Energy Information Administration (EIA) Crude Oil stockpiles report, which is due later on Wednesday. 

US crude oil inventories fell last week, providing some support to the WTI price. The American Petroleum Institute (API) weekly crude oil stock report showed crude oil stockpiles in the US for the week ending August 1 fell by 4.2 million barrels, compared to an increase of 1.539 million barrels in the previous week. The market consensus estimated that stocks would decline by 1.8 million barrels.

However, the upside for the black gold might be capped amid the Organization of Petroleum Exporting Countries and allies (OPEC+) output hikes. OPEC+ met virtually on Sunday, agreeing to boost oil production by 547K barrels per day (bps) for September as concerns mount over potential supply disruptions linked to Russia. 

The group began increasing output in April with a modest hike of 138K bpd, followed by larger-than-expected rises of 411K bpd in May, June, and July, 548K bpd in August, and now 547K bpd for September.