West Texas Intermediate (WTI) crude oil prices edged higher during Asian trading hours on Friday, hovering around $59.60 per barrel. The rebound comes as a softer US Dollar (USD) provides modest support to the commodity. However, gains remain capped amid growing concerns over an expanding global oil surplus.
Market sentiment has turned cautious following data from the US Energy Information Administration (EIA) showing a sharp build in inventories. US crude stockpiles rose by 5.202 million barrels for the week ending October 31, reversing a draw of 6.858 million barrels recorded the previous week. The data reinforced worries that an excess supply could pressure prices in the near term.
Complementing the EIA figures, the American Petroleum Institute (API) earlier reported a 6.5 million-barrel increase in US crude inventories for the same week, following a 4 million-barrel draw previously. These back-to-back inventory builds have amplified fears of an oil glut, potentially limiting the upside momentum for WTI.
On the geopolitical front, reports that the US military may be preparing to launch strikes on Venezuela the world’s 12th largest oil producer are adding a layer of risk premium to the market.
Additionally, supply disruptions from Russia are offering some support. The country’s Black Sea port of Tuapse has reportedly suspended fuel exports, while its refinery operations have been halted following Ukrainian drone attacks last weekend, according to industry sources and LSEG vessel tracking data.
Overall, while a weaker dollar is lending short-term relief to oil prices, rising inventories and supply concerns could continue to restrain WTI’s upward trajectory in the sessions ahead.
