WTI trims intraday losses near 87.70 amid Saudi announces supply cuts till 2023
- WTI price recovers some of its intraday losses due to a correction in the US Dollar.
- Greenback pulls back from the 11-month high marked on Tuesday.
- Saudi Arabia announced to continue the existing policy of output cuts through the end of the year 2023.
Western Texas Intermediate (WTI) oil price retraces the recent gains, trading around $87.70 per barrel during the European trading session on Wednesday.
The prices of Crude oil are under downward pressure as Saudi Arabia announced to maintain its existing output cuts through the end of the year 2023. This is attributed to the concerns over the fears that elevated interest rates could lead to a reduction in fuel demand.
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.
Simultaneously, discussions regarding the resumption of Iraqi oil exports through a pipeline in Turkey are still ongoing, as reported by an Iraqi oil official. This comes after Turkey's announcement of resuming operations this week, ending a nearly six-month hiatus.
According to reports from the Russian newspaper Kommersant, the Russian government is considering a partial lift of its ban on diesel exports in the coming days. This development adds to the evolving dynamics in the energy market.
The cautious sentiment due to the US Federal Reserve’s (Fed) interest rates trajectory is reinforcing the Greenback. The strengthening dollar tends to put downward pressure on WTI prices, as it makes oil more expensive for buyers using other currencies.
The US Dollar Index (DXY) retreats from the 11-month high marked on Tuesday. The spot price beats lower around 106.90 by the press time. However, the US Dollar (USD) strengthened on robust US employment data and higher US Treasury yields.
The 10-year US Bond yield reached its highest level since 2007, hitting 4.85% on Wednesday.
US JOLTS Job Openings exceeded expectations, contributing to an increase in US Treasury yields. The report revealed that job openings improved to 9.61 million in August from the previous reading of 8.92 million, surpassing market expectations.
Market participants are eagerly awaiting the US employment data, with the release of the ADP report on Wednesday and the Nonfarm Payrolls on Friday.