WTI Dips as G7 Reserve Release Eases Supply Concerns

West Texas Intermediate (WTI) crude oil prices dipped to around $88.60 during early Asian trading on Tuesday, facing selling pressure due to increased supply expectations. The Group of Seven (G7) nations agreed to release 100 million barrels of diesel and crude from their emergency reserves, adding to the existing supply from Middle Eastern exports. This move comes as Middle Eastern crude exports surpassed pre-war levels on four out of seven days in the final week of September.

U.S. President Donald Trump signed an executive order late Monday, easing restrictions on tax-exempt diesel, allowing its purchase for any reason. Market analysts note that the G7's decision to tap strategic reserves has reduced immediate supply concerns, while Saudi export volumes are returning to pre-war levels, albeit at higher costs and via less efficient routes.

Traders are closely watching the upcoming American Petroleum Institute (API) weekly crude oil stockpiles report, which could influence WTI prices. A larger-than-forecast draw would indicate stronger demand and support prices, while a bigger build would suggest softer demand or oversupply, pressuring prices further.

Geopolitical tensions in the Middle East, including recent attacks by Yemen's Houthi group, may limit further losses in WTI. Analysts at Rabobank caution that escalating tensions around Iran could disrupt energy flows through the Strait of Hormuz, potentially supporting oil prices despite current supply stability.