WTI extends slide to four-week low as US crude stocks rise; focus shifts to OPEC+ meeting

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WTI falls for a fourth consecutive session, extending the pullback from last Friday’s near two-month high.
US Crude inventories rose 1.79M barrels last week, exceeding forecasts and reversing the prior week’s draw.
Market attention shifts to the OPEC+ online meeting on Sunday.

West Texas Intermediate (WTI) Crude Oil continues to lose ground for a fourth consecutive day on Wednesday, extending the downside correction that began after last Friday’s surge to the highest level since August 4. At the time of writing, WTI is trading around $61.67, somewhat stabilizing after briefly slipping to a four-week low, still down nearly 1.0% on the day.

The latest leg lower was reinforced by a bearish set of weekly inventory figures from the US Energy Information Administration (EIA), which showed that Crude Oil inventories rose by 1.792 million barrels in the week ending September 26, topping market expectations for a 1.5 million-barrel build and reversing the previous week’s draw of 0.607 million barrels.

The bearish tone was compounded by the broader breakdown of the report, which revealed that gasoline inventories increased by about 1.8 million barrels and distillate fuel stocks climbed by roughly 0.6 million barrels.

The inventory-driven selloff came on top of recent Organization of the Petroleum Exporting Countries (OPEC+) supply headlines that have unsettled traders. Earlier this week, reports suggested the group was considering a much larger-than-expected output hike for November — as high as 400,000 to 500,000 barrels per day — raising fears of oversupply at a time of fragile demand.

However, OPEC subsequently pushed back against those reports, calling them “inaccurate and misleading,” while its Joint Ministerial Monitoring Committee (JMMC) on Wednesday stressed the importance of compliance with existing quotas and urged members that overproduced in previous months to compensate in the coming months.

Market attention is now shifting to the online OPEC+ meeting scheduled for Sunday, where an eight-country panel will review current market conditions and discuss the production outlook for November.

WTI Oil FAQs

What is WTI Oil?

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.

What factors drive the price of WTI Oil?

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.

How does inventory data impact the price of WTI Oil

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.

How does OPEC influence the price of WTI Oil?

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.