WTI drifts higher to near $58.50 as US government reopens
- WTI price gains traction to near $58.50 in Thursday’s Asian session.
- The record-long US government shutdown ended as Trump signed a funding bill.
- US crude oil inventories rose 1.3 million barrels last week, the API showed.
- OPEC shifted its oil outlook to see a small surplus next year.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $58.50 during the Asian trading hours on Thursday. The WTI edges higher after US President Donald Trump signed the bill to reopen the US government. Traders brace for the Energy Information Administration (EIA) crude oil stocks change report later on Thursday.
Reuters reported on Thursday that US President Donald Trump has signed the government funding bill, marking the official end of the longest government shutdown in US history. The reopening will lead to an avalanche of US economic data releases that were delayed due to the shutdown.
Traders believe that resumption of economic data will point to a slowing economy, and that would prompt the Federal Reserve (Fed) to reduce interest rates in December. Lower interest rates generally weaken the US Dollar (USD) as it makes oil cheaper for foreign buyers, boosting global demand and lifting WTI prices.
On the other hand, the report showed a rise in weekly US crude oil inventories, reinforcing concerns that global supply is more than ample to meet current fuel demand. Data released by the American Petroleum Institute (API) on Wednesday showed that crude oil stockpiles in the US for the week ending November 7 increased by 1.3 million barrels compared to a rise of 6.5 million barrels in the previous week. This figure beat expectations for a 1.7 million barrel build. Crude oil inventories in the United States are so far showing a net gain of 4.9 million barrels for the year, according to Oilprice calculations of API data.
The Organization of Petroleum Exporting Countries (OPEC) released its monthly report, indicating that global oil supply will slightly exceed demand in 2026, marking a further shift from the group's earlier projections of a supply deficit.
"OPEC's signal of a supply surplus unleashed previously pent-up bearish sentiment in the previous session, while a U.S. crude inventory build added pressure, pushing oil prices to continue to slide on Thursday morning," said Yang An, analyst at Haitong Securities.
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.
Author
Lallalit Srijandorn
FXStreet
Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.
