WTI. Price Analysis. Forecast. Increased Production Devalues Oil

On Wednesday, prices for West Texas Intermediate (WTI) crude oil plummeted, erasing all three days of gains and reaching a November low amid various fundamental factors.

Expectations of an imminent end to the record-long government shutdown in the US are strengthening the dollar. This fact positively affects investor sentiment and leads to profit-taking.

The US national debt is currently under discussion — a vote in the House of Representatives is expected on a bill that proposes restoring government operations and resuming the work of federal agencies. This progress has helped alleviate some short-term financial risk concerns, increased risk appetite in global markets, and slightly strengthened the dollar. A stronger dollar often leads to lower oil prices, making it more expensive for foreign consumers.

Additionally, the oversupply of oil is limiting the recovery of oil prices. According to OPEC's October Monthly Oil Market Report (MOMR), the organization has maintained its forecast for an increase in global oil demand in 2025 at a rate of 1.3 million barrels per day (mb/d). Meanwhile, total demand is expected to average 105.1 mb/d.

The report emphasizes that oil production in non-OPEC countries, such as the US, Brazil, Canada, and Argentina, is expected to increase by 0.6 mb/d in 2026. At the same time, the forecast for OPEC's own oil demand in 2026 has been slightly reduced to 43 million barrels per day, down 100,000 barrels per day from the previous forecast.

To obtain better trading opportunities, traders should pay attention to the US Energy Information Administration (EIA) weekly report on oil inventories. Due to holidays, its publication has been moved to Thursday. Preliminary expectations indicate that inventories may increase by 1 million barrels after a rise of 5.2 million barrels last week.

From a technical perspective, oscillators on the daily chart are negative, and if prices do not hold the 58.75 level, a decline toward the round 58.00 level may accelerate, potentially updating the November low. Following that, the next price stop could be at 57.40, before an eventual drop to the October low around the round 56.00 level.