WTI extends its upside around $77.50 on the hope for OPEC supply cuts

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $77.50 so far on Tuesday. WTI prices extend their upside amid the expectation that OPEC+ is likely to announce further supply cuts following a meeting early next week.

Saudi Arabia, the world's largest oil exporter, is planning to extend oil production cuts by 1 million barrels a day through next year, while OPEC+ considers additional cuts in response to declining prices and rising tensions over the Israel-Hamas conflict. If additional cuts are agreed upon, this could boost WTI prices in the near term.

On the other hand, the concern about a slowing global economy outweighed the prospect of deepening supply cuts by OPEC and its allies, such as Saudi Arabia and Russia. The Conference Board revealed on Monday that the US leading indicator for October fell 0.8% MoM from a 0.7% MoM drop in September. The report suggested that elevated inflation, high interest rates, and contracting consumer spending would push the US economy into a very short recession. This, in turn, might cap the upside of WTI prices.

Oil traders will monitor the Federal Open Market Committee (FOMC) Meeting Minutes on Tuesday, which might offer hints regarding future policy rate direction. Additionally, the US crude oil inventory data, including API Weekly Crude Oil Stock and EIA Crude Oil Stocks Change for the week ending November 17, will be released on Tuesday and Wednesday, respectively. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around WTI prices.