WTI holds losses near $57.00 due to OPEC+ oversupply concerns
- WTI loses ground as OPEC+ members are expected to increase their production.
- President Trump reiterated that Indian Prime Minister Narendra Modi assured him India would halt purchases of Russian Oil.
- The data firm Kpler indicates that India’s imports of Russian Oil are expected to rise about 20% in October.
West Texas Intermediate (WTI) Oil price trims its recent gains from the previous session, trading around $57.00 per barrel during the Asian hours on Monday. Crude Oil prices face challenges amid concerns over rising global supply.
Last week’s International Energy Agency (IEA) report revealed expectations that the members of the Organization of the Petroleum Exporting Countries and its allies, including Russia, popularly known as OPEC+, may increase their production, citing its increase in projections for a market surplus.
Traders pay attention to further development on India’s decision to buy Russian Oil. US President Donald Trump reiterated on Sunday that Indian Prime Minister Narendra Modi assured him India would stop purchasing Russian Oil, while warning that New Delhi would face “massive” tariffs if it failed to comply, per Reuters.
On Thursday, a White House official said that India has cut its Russian Oil imports by half, but Indian sources have not witnessed any immediate reduction. Reuters also cited sources saying that Indian refiners have already placed orders for November loadings, including some scheduled for December arrival, suggesting that any reduction may only be reflected in import data from December or January.
The commodities data firm Kpler suggests that India's imports of Russian Oil are set to rise about 20% this month to 1.9 million barrels per day, as Russia ramps up exports after Ukrainian drones hit its refineries.
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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