• WTI crude drops 2.37% to $88.54 per barrel as profit-taking ensues and the US Dollar strengthens, driven by rising US Treasury bond yields.
• Concerns over economic slowdown, highlighted by weaker manufacturing data from China and Europe, pose potential risks to oil demand.
• Increased oil output from OPEC countries and potential supply increments from Turkey and Saudi Arabia add to the downward pressure on oil prices.

West Texas Intermediate (WTI), the US crude oil benchmark, sinks after hitting a daily high of $91.84 per barrel, though profit-taking and recent news of an increase in oil output weighed on oil prices. Therefore, WTI is trading at $88.54 a barrel, down 2.37%.

West Texas Intermediate crude experiences a downturn amid a strengthening US Dollar, increased oil output, and concerns over global economic deceleration impacting demand

The rise of the Greenback (USD) is seen as the main driver, while traders booked profits, as noted by Reuters. US Treasury bond yields, particularly the 10-year benchmark note hitting 4.70%, sponsored a leg-up to the buck, as shown by the US Dollar Index (DXY). The DXY, which measures the US Dollar performance against six currencies, trades at around 106.94, posting gains of 0.72%, a headwind for US dollar-denominated commodities.

Oil traders must be aware of an ongoing economic slowdown. The latest China’s Caixin Manufacturing PMI, which decelerated, spurred a revision in the global economic outlook. Fitch Ratings said that despite the resilience in US consumer demand, , reviewed its forecast downwards, for 2024, due to China’s deepening property slump.

That data and weaker-than-expected factory activity data in Europe weighed on WTI’s prices, as an economic deceleration could dent oil’s demand.

Lately, a survey revealed by Reuters showed that oil output climbed for the second straight month in September, as the Organization of Petroleum Exporting Countries (OPEC) revealed. Increases were led by Nigeria and Iran, as OPEC countries pumped 27.73 million barrels per day, up from 120,000 in August