West Texas Intermediate (WTI) Oil prices fell on Thursday during the early European session. The price was $58.35 per barrel, down from $58.49. Meanwhile, Brent crude was priced at $62.25, a decrease from $62.43. WTI Oil is a high-quality crude oil from the United States. It has low gravity and sulfur content and is distributed through the Cushing hub. It serves as a key benchmark in the oil market and is frequently reported in the news.

Factors Influencing WTI Oil Prices

WTI Oil prices are mainly affected by supply and demand. Global economic growth impacts demand, while factors like political instability, conflicts, and sanctions can impact supply. The value of the US Dollar also plays a role since oil is traded in dollars, which can influence prices inversely. Data on oil inventories from the American Petroleum Institute (API) and the Energy Information Administration (EIA) greatly affect WTI Oil prices. A drop in inventories suggests higher demand, potentially pushing prices up. In contrast, higher inventories indicate excess supply, which can lower prices. OPEC’s decisions have a significant impact on WTI Oil prices. By changing production limits for member countries, OPEC can influence supply levels and adjust prices. OPEC+ also includes non-OPEC members, like Russia, in their discussions. Currently, WTI prices softened to $58.35, reflecting broader economic concerns. Data showing slower Q3 growth in major Asian markets, combined with a strong US Dollar, is reducing demand expectations. This situation makes oil, priced in dollars, more expensive for international buyers.

Upcoming OPEC+ Meeting

On the supply side, strong US production is putting pressure on prices. This year, production has reached record highs of over 13.5 million barrels per day. This steady supply of non-OPEC oil has helped build inventories and limited any significant price increases we saw earlier in the fall. Looking back to the shale boom of the mid-2010s, US output can greatly influence global prices. The upcoming OPEC+ meeting in early December is highly anticipated. With prices below $60, the market expects the group to announce more production cuts to help support prices in the new year. This raises the potential for volatility, which can be managed or traded through options. In the short term, we should pay attention to the weekly inventory data from the EIA. Although trading is light today due to Thanksgiving in the US, next week’s report will provide insights into holiday travel demand. A larger-than-expected drop in gasoline inventories could lead to a short-term price increase, while a rise would reinforce bearish sentiment. We find ourselves in a scenario where current bearish trends from macroeconomic data could contrast with the possibility of bullish supply-side changes. Derivative traders might want to position for a rebound by looking at call options that expire after the OPEC+ meeting. However, any signs of discord within the organization could push prices below crucial technical support levels. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now