West Texas Intermediate (WTI) Oil prices fell during the early European session on Friday. WTI was priced at $60.99 per barrel, down from the previous day’s closing price of $61.16. Brent crude also dropped, going from $64.99 to $64.82. WTI Oil is a type of crude oil that comes from the United States and is distributed through the Cushing hub. It has low gravity and low sulfur content, making it a high-quality oil. The price of WTI is mainly influenced by supply and demand, global economic growth, political issues, and production quotas set by OPEC.

Oil Inventory Changes

Changes in oil inventories reported by the American Petroleum Institute (API) and the Energy Information Agency (EIA) can impact WTI prices. A decline in inventories typically indicates higher demand, while an increase suggests more supply, which can lower prices. OPEC, made up of 12 member countries, also affects production levels and WTI pricing. In other news, Canada’s unemployment rate is expected to rise in September, which may lead to potential rate cuts. The US continues to use tariffs as part of its foreign policy, reaffirming its position in recent months. Additionally, Coinbase and Mastercard are competing to buy the stablecoin firm BVNK, valued at around $2 billion. With WTI crude oil dropping to about $60.99, there is a clear bearish trend in the market. This decline happens amidst growing concerns about the global economy. The small drop from yesterday’s price indicates that momentum for oil prices is currently downward.

Impact of Global Economic Data

Fears about demand are backed by recent global economic data. Last week, the International Monetary Fund revised its global growth forecast for 2026 downward, pointing to slowing industrial activity in Europe and Asia. The cooling labor market in Canada, a key US trading partner, further supports concerns about declining energy demand. Additionally, the US Dollar Index has risen to a six-month high of 106.5, making oil priced in dollars more costly for foreign buyers. This strength is linked to recent hints from the Federal Reserve that interest rates will likely stay high into the new year. A strong dollar often leads to lower oil prices. Recent supply data also indicates weakness. A report from the Energy Information Administration (EIA) last Wednesday showed an unexpected increase in US crude inventories by 2.1 million barrels. This suggests that supply is outpacing demand, confirming the bearish outlook for prices. We saw a similar scenario in late 2023 when fears of a global slowdown caused oil prices to drop significantly, despite OPEC+ maintaining production cuts. This history shows that concerns about demand can often outweigh supply management efforts in the short term. Traders in derivatives may want to consider strategies that benefit from further price declines or sideways movement in the coming weeks. However, we should be attentive to the upcoming OPEC+ meeting scheduled for early December 2025. There are rumors that the group may announce deeper production cuts to help stabilize prices. This event could provide a significant bullish boost, so any bearish positions should be handled carefully as we approach the meeting date. Create your live VT Markets account and start trading now.

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