WTI extends rally for fourth day as OPEC+ output hike offsets US inventory build
- WTI climbs for a fourth straight day, buoyed by supply-side optimism despite a larger-than-expected US inventory build.
- EIA data showed US Crude inventories rose by 3.72 million barrels last week, exceeding forecasts of a 2.25 million-barrel build.
- OPEC+’s modest 137,000 bpd output hike eases oversupply fears, providing a supportive backdrop for prices.
West Texas Intermediate (WTI) Crude Oil is extending its recovery for a fourth consecutive day on Wednesday, with the market staging a fresh leg higher immediately after the release of the US Energy Information Administration’s (EIA) weekly Crude Oil Stocks Change report.
At the time of writing, the US benchmark is trading around $62.25 per barrel, up nearly 0.80% on the day, adding to the rebound from last week’s four-month low near $60.00.
The EIA data showed US commercial crude inventories rising by 3.72 million barrels, above the expected 2.25-million-barrel increase. While the headline figure points to a build in supplies, market attention remained firmly anchored on OPEC+’s smaller-than-expected production hike of 137,000 barrels per day for November, which has eased fears of a supply glut and provided a supportive backdrop for prices.
Even so, the upside remains constrained by structural headwinds. The EIA raised its forecast for US crude production in 2025 to a record 13.53 million barrels per day, underscoring the likelihood of ample supply ahead.
Geopolitical risks also remain in focus. Market participants are watching for potential supply disruptions in the Middle East, including lingering Iran-Israel tensions and the risk of attacks on Oil infrastructure in Iraq, while uncertainty over Western sanctions on Russian and Iranian crude flows keeps traders on alert.
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On the technical front, WTI remains vulnerable as it continues to trade below its key moving averages. Immediate support lies near $61.50, with a break below exposing last week’s low around $60.00. On the upside, any recovery attempts are likely to face initial resistance near the 21-day Simple Moving Average (SMA) at $62.78, followed by the 50-day SMA around $63.26, which needs to be cleared to confirm a stronger recovery. The daily Relative Strength Index (RSI) at 47.3 remains neutral, suggesting consolidation could persist before a clearer directional move emerges.
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.