WTI slips below $63.00 on OPEC+ output hike plans
- WTI price weakens due to oversupply concerns as OPEC+ could increase Oil production for November.
- Oil prices eased after Iraq’s Kurdistan region resumed exports following a 2.5-year pause.
- President Trump and Israeli Prime Minister Benjamin Netanyahu had reached a tentative 20-point US peace plan for Gaza.
West Texas Intermediate (WTI) Oil price continues to lose ground, trading around $62.90 per barrel during the Asian hours on Tuesday. Crude Oil prices weaken due to another anticipated production increase by the Organization of the Petroleum Exporting Countries and allies, including Russia, following the resumption of Oil exports from Iraq's Kurdistan region.
OPEC+ is expected to approve a production hike for November at its meeting this weekend. The Oil group is likely to agree on boosting output by at least 137,000 barrels per day at Sunday’s gathering.
Oil prices slipped after Iraq’s Kurdistan region resumed exports following a 2.5-year halt, adding supply to a market facing surplus risks. Under a new deal with Baghdad, the Kurdistan Regional Government, and international Oil firms, 180,000–190,000 barrels per day (bpd) will initially flow to Turkey’s Ceyhan port.
US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu announced Monday they had reached a tentative 20-point US peace plan for Gaza. Trump cautioned that if Hamas rejects the proposal, Israel would have his full backing to “finish the job.” Meanwhile, the EU reimposed sanctions on Iran over its continued violations of the nuclear agreement, mirroring recent UN measures.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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