By Frank Walbaum, Market Analyst at Naga
WTI crude oil futures climbed on Tuesday, extending gains from the previous session. The price increase is driven by a combination of a conservative production hike from OPEC+ and growing concerns over potential new sanctions on Russian oil exports.
The Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to a modest production increase of 137,000 barrels per day (bpd) starting in October. This conservative stance highlights the group’s caution and helped support the market.
Market concerns are also being fueled by the prospect of tougher sanctions against Russia following recent escalations in its war with Ukraine. The US administration has signaled that it may impose additional restrictions, which could significantly disrupt global crude oil flows.
On the demand side, market sentiment is supported by robust data from China. The country’s crude oil imports increased by 4.8% in August compared to the previous month, reaching approximately 49.5 million tons. China’s consistent demand and strategic stockpiling have been crucial in absorbing excess global production this year.
Looking ahead, traders are now closely watching for upcoming US inventory data. The American Petroleum Institute (API) will release its weekly figures tonight, followed by the official Energy Information Administration (EIA) report on Wednesday. After last week’s mixed results, the market is poised to react to any significant surprises that deviate from expectations.