WTI declines below $63.00 as weekly EIA crude inventories unexpectedly build

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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $62.95 during the early Asian trading hours on Friday.

WTI price loses ground to near $62.95 in Friday’s Asian session.
US crude oil stocks unexpectedly rose for the week ending August 29.
OPEC+ is considering raising oil production further, said Reuters.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $62.95 during the early Asian trading hours on Friday. The WTI declines amid an unexpected build in U.S. crude inventories last week and expectations that OPEC+ producers will increase output targets at the upcoming meeting. Traders brace for the Organization of the Petroleum Exporting Countries and its allies (OPEC+) meeting later on Sunday.

Crude inventories unexpectedly rose, indicating weaker demand and weighing on the WTI price. Data released by the Energy Information Administration (EIA) on Thursday showed that crude oil stockpiles in the US for the week ending August 29 climbed by 2.415 million barrels, compared to a fall of 2.392 million barrels in the previous week. The market consensus estimated that stocks would decline by 1.8 million barrels.

Additionally, a report from Reuters that OPEC+ is considering an increase in its crude production levels raises concerns over a global oil supply glut, which contributes to the WTI’s downside. OPEC+ countries are scheduled to meet on Sunday to decide on October output. The group had already agreed to raise output targets by about 2.2 million barrels per day (bpd) from April to September, in addition to a 300,000 bpd quota increase for the United Arab Emirates.

On the other hand, geopolitical tensions might help limit the WTI’s losses. The United States is looking to pressure buyers of Russian crude to push Moscow into agreeing to a truce in Ukraine. US Treasury Secretary Bessent said on Tuesday that the US "will be examining sanctions on Russia very closely this week" due to the ongoing war in Ukraine. US President Donald Trump also told European leaders to stop buying Russian oil, addressing them during a call, per Reuters.

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.