WTI trims intraday losses near $87.70 amid Turkey to resume operations on Iraq’s pipeline

Western Texas Intermediate (WTI) oil price trades lower around $87.70 per barrel. The Crude oil prices are experiencing a fourth consecutive day of losses, having declined by 1.0% during the early Asian trading session on Tuesday. Despite this downward trend, there has been a slight recovery, with prices trimming some of the intraday losses.

Turkey's announcement that it will resume operations on a pipeline from Iraq, after being suspended for about six months, has added further pressure on oil prices.

OPEC+ is anticipated to maintain its current output settings when it convenes on Wednesday. This decision is expected to keep oil supplies tight, impacting the overall supply and demand balance in the market.

OPEC+ meetings are closely monitored by market participants as they have a significant influence on oil prices and the global energy landscape.

As per a Reuters survey, Saudi Arabia is expected to increase its November official selling price of Arab Light crude to Asia for the fifth consecutive month.

US Dollar Index (DXY) climbed to an 11-month high, trading around 107.10 by the press time. The Greenback strengthens on the back of higher US Treasury yield.

The 10-year US Treasury yield rose above its highest level since 2007 after the United States (US) averted a partial government shutdown. The spot price stands at 4.68% at the time of writing.

The market caution surrounding the US Federal Reserve’s (Fed) interest rates trajectory is reinforcing the positive sentiment for US Dollar (USD).

Furthermore, the mixed United States (US) data released on Monday, reinforced the Greenback. US ISM Manufacturing PMI improved to 49.0 in September from 47.6 in the previous reading, above the market consensus of 47.7. Manufacturing Prices Paid fell significantly from 48.4 to 43.8. The Employment Index rose from 48.4 to 51.2.

Federal Reserve (Fed) Governor Michelle Bowman expressed on Monday that it seems appropriate to further increase the policy rate and sustain it at restrictive levels for an extended period.

In contrast, Fed Vice Chair for Supervision Michael Barr stressed a cautious approach to monetary policy. Barr highlighted the importance of considering interest rates trajectory. Nevertheless, Barr is optimistic that the Fed can navigate inflation without causing significant harm to the job market.

Oil traders await the US employment data, with the release of the ADP report on Wednesday and the Nonfarm Payrolls on Friday.