WTI price declines to near $63.20 in Tuesday’s early Asian session.
Excess supply fears weigh on the WTI price, but rising geopolitical risks might cap its downside.
The American Petroleum Institute (API) weekly crude oil stock report is due later on Tuesday.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $63.20 during the early Asian trading hours on Tuesday. The WTI extends the decline amid lingering oversupply concerns. Oil traders await the release of the American Petroleum Institute (API) weekly crude oil stock report later on Tuesday.
Reuters reported on Monday that Iraq, the Organization of the Petroleum Exporting Countries' (OPEC) second-largest producer, has increased oil exports under an OPEC+ agreement. It also estimates September's exports to range from 3.4 million to 3.45 million barrels per day (bpd). Earlier this month, OPEC+ members agreed to raise production from October by 137,000 bpd. The group has been hiking production since April after years of cuts to support the oil market.
Persistent geopolitical tensions in Russia and the Middle East could boost the WTI price. Russian military jets violated Estonian airspace for 12 minutes on Friday, hovering in neutral airspace above the Baltic Sea. This follows a previous similar violation in Poland. The European Union (EU) is preparing a strong response against Russian intrusions.
The US Federal Reserve (Fed) decided to cut its key interest rate by 25 basis points (bps) at its September meeting last week and signaled that two more reductions are on the way before the end of the year. Fed Governor Stephen Miran, who voted against the quarter-percentage-point reduction in favor of a steeper 50 bps rate cut last week, said on Monday that the central bank should cut interest rates aggressively to reduce risks to the economy's outlook. Lower interest rates generally support oil demand, and the Fed’s guidance suggests it now views risks from rising unemployment as outweighing those from persistent inflation.
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