WTI holds steady near $68.50

West Texas Intermediate (WTI), the benchmark US crude oil, is trading around $68.40 on Friday, with the price remaining steady as a steep draw in US fuel stocks offset oversupply fears.

The Energy Information Administration (EIA) weekly report showed crude stocks increased last week. US crude oil stockpiles for the week ending November 8 rose by 2.089 million barrels, compared to a rise of 2.149 million barrels in the previous week. The market consensus estimated that stocks would increase by 1.85 million barrels.

Meanwhile, US gasoline inventories hit a two-year low, falling by 4.4 million barrels last week, compared with analysts’ expectations of a 600,000-barrel build.

A stronger dollar might cap the upside for the USD-denominated oil as it makes crude oil more expensive for holders of other currencies, which can reduce demand.

The DXY Dollar Index, a measure of the value of the USD against a basket of six currencies, currently trades near 106.90, after hitting a fresh year-to-date high near 107.05.

“Crude futures are trying to establish equilibrium pricing as a rising US dollar index is creating a further headwind, along with a Trump administration that will now have control of Congress, which is likely to roll back most of the Biden administration’s energy policies,” Dennis Kissler, senior vice president of trading at BOK Financial, said in a note.

Furthermore, the Organisation of Petroleum Exporting Countries’ latest downward revision for demand growth earlier this week might weigh on the WTI.

OPEC lowered its global oil demand growth predictions for 2024 and 2025, claiming sluggish demand in China, India and other areas, marking the producer group’s fourth straight downward revision.

(Source: OANDA)