{"id":119717,"date":"2025-09-04T15:58:42","date_gmt":"2025-09-04T12:58:42","guid":{"rendered":"https:\/\/ironfx-com.wp-dev.int.theitops.net\/?p=119717"},"modified":"2025-09-04T15:58:43","modified_gmt":"2025-09-04T12:58:43","slug":"oil-outlook-wtis-price-relenting-the-gains-of-the-past-week","status":"publish","type":"post","link":"https:\/\/www.ironfxcn.com\/ph\/oil-outlook-wtis-price-relenting-the-gains-of-the-past-week\/","title":{"rendered":"Oil Outlook: WTI\u2019s price relenting the gains of the past week"},"content":{"rendered":"

The main characteristic of the movement of oil prices since yesterday was their intense drop erasing the gains made over the past week<\/a>. On a fundamental level in todays\u2019 report we are to have a look at the market\u2019s expectations for OPEC to hike its production levels, the state of the US oil market, but also at what macroeconomic data suggest for the oil market. The report is to be concluded with a technical analysis of WTI\u2019s daily chart for a rounder view.<\/p>\n\n\n\n

OPEC expected to hike output levels again<\/strong><\/h2>\n\n\n\n

\u00a0Eight members of OPEC are reportedly to consider a possible increase of oil production levels in October, at an online meeting on Sunday. OPEC sources are reportedly to have verified that production hikes are on the table. <\/p>\n\n\n\n

Market expectations were for the oil producing alliance to maintain oil production levels unchanged after the hike of oil production levels decided for the period of April to September by two million barrels per day (bpd). It should be noted that member countries of OPEC have to perform a balancing act between not reducing their revenue from oil and hiking production levels which is understandably to bring oil prices down, should there not be a substantial increase of oil demand. <\/p>\n\n\n\n

We see the case for the organisation to proceed with a production hike in an effort to regain market share in the international oil market. At the same time, such efforts may face headwinds as some members may prefer to keep the price at higher levels. <\/p>\n\n\n\n

Please bear in mind that the alliance has reportedly pumped more in the past month, underscoring the possibility of another output hike being announced. Should we see the market\u2019s expectations for the organisation to hike oil production levels intensifying, we may see oil prices retreating further. The same effect could also be created by a possible announcement on Sunday or after the weekend should oil production levels be hiked beyond market expectations, enhancing market worries for an oversupply of the international oil market.<\/p>\n\n\n\n

Is the US oil market easing again?<\/strong><\/h2>\n\n\n\n

On a more localised view we note that the US oil market seems to be showing some signs of easing. Past Friday Baker Hughes announced another increase of active oil rigs in the US this time by one, increasing the number of active oil rigs from 411 to 412, instead of dropping as expected to 408. <\/p>\n\n\n\n

The increase of active oil rigs in the US may be signalling an increase in demand in the US oil market which forces oil producers to reactivate shut in wells, thus should be considered as a bullish sign for oil prices and a tightening signal for the US oil market. Yet on Wednesday, API unexpectedly reported an increase of US oil inventories by 622k barrels. <\/p>\n\n\n\n

The release highlights how US production levels may have overcome aggregated oil demand in the US economy thus allowing for a slack to be created in the US oil market. However such an easing of the US oil market would have to be verified also by EIA, which is to release its weekly crude oil inventories figure later during the day. <\/p>\n\n\n\n

Should EIA also report an increase of US oil inventories and in the coming week the two organisations imply further easing of the US oil market, we may see oil bears being further encouraged.<\/p>\n\n\n\n

Macroeconomic data mixed<\/strong><\/h2>\n\n\n\n

In the past few days macroeconomic data (PMI figures and factory orders) tended to highlight that the manufacturing sectors of both the US and China tended to struggle to increase their economic activity, which in turn may imply lower oil demand and thus were sending bearish signals for oil prices. <\/p>\n\n\n\n

Yet at this point one should also note that market expectations for the Fed to cut rates further in its next meeting on the 17th<\/sup> of September, were enhanced yesterday as employment data were not so good ahead of a key release for the Fed\u2019s decision, of US employment data tomorrow.<\/p>\n\n\n\n

Oil Technical Analysis<\/strong><\/h2>\n\n\n\n

WTI Cash Daily Chart<\/strong><\/h3>\n\n\n\n
\"Technical<\/figure>\n\n\n\n