WTI holds below $70.00 amid demand concerns

• WTI price holds steady near $69.75 in Friday’s early Asian session. 
• Continued soft demand in China drags the WTI price lower.
• A delay in OPEC+ supply increase and encouraging reports from weekly US crude oil inventories might cap WTI’s downside. 

West Texas Intermediate (WTI), the US crude Oil benchmark, is trading around $69.75 on Friday. WTI price edges lower to a fresh 2024 low amid worries about demand in the US and China. However, the delay in OPEC+ oil output increase and a rise in large crude oil inventory draw might help limit WTI’s losses. 

The concerns about the Chinese sluggish economy and oil demand undermine the WTI prices as China is the world’s largest importer of crude oil. The weaker-than-expected Chinese NBS Manufacturing PMI released on the weekend and the softer Caixin Manufacturing PMI on Wednesday contributed to the WTI’s downside. 

However, the downside of the black gold might be limited due to positive news from the Organization of the Petroleum Exporting Countries and allies (OPEC+) and the rise in large crude inventory draws.

OPEC+ has agreed to delay planned output increases for October and November, per Reuters on Thursday. ''Libyan production is expected to resume after the settlement of disputes in the country, which also weighed on crude oil prices. However, the OPEC+ decision could support crude oil prices at lower levels. The dollar index also plunged amid strength in the Japanese Yen and may support crude oil prices at lower levels,'' said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

US crude oil inventories fell more than expected last week. According to the US Energy Information Administration (EIA), crude oil stockpiles in the United States for the week ending August 30 declined by 6.873 million barrels, compared to a decrease of 0.846 million barrels in the previous week. The market consensus estimated that stocks would decline by just 0.9 million barrels.