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West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $59.45 during the Asian trading hours on Friday. The WTI declines amid an increase in US crude oil stockpiles, signaling excess supply.

Data released by the Energy Information Administration (EIA) on Wednesday showed that crude oil stockpiles in the US for the week ending November 23 increased by 574,000 barrels compared to a rise of 2.774 million barrels in the previous week. This figure came in above the market consensus of -1.9  million barrels.

An imminent quarter-point rate cut by the US Federal Reserve (Fed) could strengthen the outlook for higher energy demand in 2025. Traders are currently pricing in an 89% probability of a quarter-point rate cut next week, according to the CME FedWatch tool, with an expected 89 basis points (bps) of easing by the end of next year. Lower interest rates generally drag the US Dollar (USD) lower and boost the WTI price, as it makes USD-denominated commodities cheaper for foreign buyers.

Furthermore, attacks on Russian oil infrastructure by Ukraine raised the prospect of supply constraints, which could also underpin the WTI price. Ukraine targeted the Druzhba pipeline in Russia’s central Tambov region on Wednesday, according to a Ukrainian military intelligence source.  

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