WTI holds in bullish territory near key $75 level

WTI is consolidated in Asia after oil prices slipped on Wednesday due to US crude inventories rising by more than anticipated and despite the gas/petrol crisis in the UK and energy crunch in China. 

US crude stockpiles rose by 4.6 million barrels last week, exceeding expectations, boosted by a rebound in output as offshore facilities shut in by two US Gulf hurricanes resumed activity. In other related news, OPEC planned to maintain its deliberate approach to adding supply to the market.

On Wednesday, Brent crude settled down 45 cents to $78.64 a barrel, after reaching $80 on Tuesday. WTI prices lost down 46 cents, or 0.6%, to $74.83 a barrel. However, WTI spot added some 0.6% on the day. At the time of writing, spot WTI is trading at $74.70 and flat for the day so far. 

Reuters reported that US oil, gasoline and distillate stockpiles rose last week, according to the U.S. Energy Department. U.S. output rose to 11.1 million barrels per day, roughly in line with where production was before Hurricane Ida hit about a month ago. 

Meanwhile, the Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, is reported to likely to stick to an existing deal to add 400,000 barrels per day (bpd) to its output for November when it meets next week, sources said, despite pressure from consumers for more supply.

As for China and the state of affairs in the UK, unprecedented power cuts in Northern China left millions without electricity. In the UK, fuel isn’t being transported to petrol stations from storage facilities is a lack of lorry drivers. When the UK formally left the European Union, it tightened immigration rules so that EU citizens can no longer work visa-free in Britain.

''Energy supply risks are surging, as competition grows between Asian and European nations to secure their supplies ahead of winter,'' analysts at TD Securities said.

''After all, delta-variant risks have proved benign, while global mobility continues to rebound, with expectations growing that air traffic will spark a continued rise in jet fuel demand, as departure levels increase significantly across both APAC and the US.''

''In this context, the US State Department is increasingly seeking to pressure Iran to return to the negotiating table, through backchannel negotiations seeking to curtail Chinese purchases of their crude. In response to the strong price action, WTI crude should see substantial CTA buying flow, supporting higher prices still.''