WTI extends gains above $91.00 due to OPEC+ supply cuts

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading higher around $91.20 during the European session on Tuesday. WTI prices are continuing the winning streak that began on September 8.

The prices of black gold are experiencing upward support due to a tight production outlook by Saudi Arabia and Russia. However, the gloomy economic situation in China may limit the potential of Crude oil prices.

Moreover, the International Energy Agency (IEA) released a report last week, indicating that the reduction in OPEC+ oil production would create a notable supply deficit in the fourth quarter of the year, starting in September. This supply deficit is expected to have a significant impact on the oil market, potentially leading to higher oil prices.

Saudi Arabia and Russia, as two of the world's largest oil exporters, have announced their commitment to extending oil output restrictions until the end of 2023. This decision involves Saudi Arabia reducing its oil production to around 1.3 million barrels per day (bpd) for the rest of 2023. The move aims to support oil prices and stabilize the global oil market by limiting the supply of crude oil.

In its monthly report last week, OPEC expressed optimism about the demand for oil in China throughout the year 2023. OPEC's positive outlook extends to global oil demand, as the organization forecasts strong growth in demand for both 2023 and 2024. This positive outlook comes despite challenges such as rising interest rates and higher inflation, which could potentially impact global economic conditions.

Saudi Arabia's Energy Minister, Prince Abdulaziz bin Salman, emphasized on Monday that the Organization of Petroleum Exporting Countries and its allies (OPEC+) are focused on maintaining stability in the oil markets and enhancing global energy security. He stated that their goal is not to target a particular price level for crude oil.

US Dollar Index (DXY) extends its losing streak for the third successive day, trading lower around 105.00 at the time of writing. Meanwhile, US Treasury yields are rebounding from the losses seen in the previous session, with the yield on the US 10-year bond at 4.31% by the press time.

The upcoming week will see the release of critical data that could influence the USD-denominated WTI oil price. This includes the publication of Crude Oil Stock data by both the American Petroleum Institute (API) and the International Energy Agency (IEA) for the week ending September 15.

Additionally, on Friday, the US will unveil preliminary S&P Global PMI data for September. These events have the potential to substantially affect the WTI oil price, and oil traders will closely analyze the data to identify trading opportunities in the WTI market.