14 Nov 2024

WTI prices have experienced a slight rebound, approaching $67.90 during the early Asian trading session on Thursday. According to the American Petroleum Institute (API) report released on Wednesday, US crude inventories decreased by 777,000 barrels in the previous week. However, the strengthening US dollar and OPEC's recent downward adjustment of demand growth forecasts may limit the potential for further increases in WTI prices.

As of Thursday, West Texas Intermediate (WTI), the benchmark for US crude oil, is trading around $67.90, reflecting a modest recovery following an unexpected reduction in crude oil inventories. Nevertheless, the robust performance of the US dollar could restrain any significant gains.

The API's weekly report indicated a decline in crude oil stockpiles in the United States for the week ending November 8, with a decrease of 777,000 barrels, contrasting with a rise of 3.132 million barrels the previous week. Market expectations had anticipated an increase of 1 million barrels.

The potential for price increases in crude oil may be constrained as the US Dollar Index (DXY) reached its highest point since November 2023, following the release of the US Consumer Price Index (CPI) inflation data for October, which met forecasts. A stronger dollar makes oil priced in USD more expensive for international buyers, potentially dampening demand.

Additionally, OPEC's recent downward revision of its global oil demand growth projections for 2024 and 2025, attributed to weak demand in China, India, and other regions, further contributes to the downward pressure on WTI prices. This marks the fourth consecutive reduction by the organization.

Looking forward, oil traders will be attentive to the upcoming report on US Energy Information Administration (EIA) crude oil stockpiles, scheduled for release later on Thursday. Furthermore, the US Producer Price Index (PPI), Initial Jobless Claims, and statements from Federal Reserve officials will also be closely observed throughout the day.