WTI drifts lower to near $65.50 amid fears of OPEC triggering oversupply

• WTI price edges lower to near $65.50 in Thursday's early Asian session. 
• Oil loses ground after a report that OPEC+ will consider a fresh round of production increases on Sunday.
• API inventory showed an unexpected build in crude stocks last week.

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $65.50 during the early Asian trading hours on Wednesday. The WTI declines on concerns over a global oil supply glut after Reuters reports that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) is considering an increase in its crude production levels.  

OPEC+ countries are scheduled to meet on Sunday to decide on October output. It is widely reported that the group will consider further raising oil production at this meeting. OPEC+ had already agreed to raise output targets by about 2.2 million barrels per day (bpd) from April to September, in addition to a 300,000 bpd quota increase for the United Arab Emirates. Concerns about higher OPEC production are negative for the WTI price. 

Data released by the American Petroleum Institute (API) on Wednesday showed that crude oil stockpiles in the US for the week ending August 29 rose by 622,000 barrels, compared to a decline of 974,000 barrels in the previous week. The market consensus estimated that stocks would fall by 3.4 million barrels.

Nonetheless, the ongoing war between Russia and Ukraine could lead to additional sanctions on Russian energy exports. This, in turn, could reduce global oil supplies and support the WTI price. US Treasury Secretary Bessent said on Tuesday that the US "will be examining sanctions on Russia very closely this week" due to the ongoing war in Ukraine. Meanwhile, US President Donald Trump threatened to impose additional sanctions on Russia if no progress is made in peace talks with Ukraine. 

Oil traders will keep an eye on the release of the Energy Information Administration's (EIA) weekly crude oil stock report, which is scheduled for release later on Wednesday. The attention will shift to the US Nonfarm Payrolls (NFP) report for August later on Friday. In case of the stronger-than-expected outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price.