WTI holds steady near $68.50, renewed US dollar demand might cap its upside

WTI price flat lines near $68.40 in Friday’s early Asian session. 

US crude stocks increased by 2.1 million barrels last week, according to the EIA. 

A stronger USD and demand worries might drag the WTI price lower. 

West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $68.40 on Friday. The WTI price remains steady as a steep draw in US fuel stocks offset oversupply fears. 

The Energy Information Administration (EIA) weekly report showed crude stocks increased last week. Crude oil stockpiles in the United States for the week ending November 8 rose by 2.089 million barrels, compared to a rise of 2.149 million barrels in the previous week. The market consensus estimated that stocks would increase by 1.85 million barrels. Meanwhile, US gasoline inventories hit a two-year low, falling by 4.4 million barrels last week, compared with analysts' expectations of a 600,000-barrel build. 

A stronger US Dollar (USD) might cap the upside for the USD-denominated oil as it makes oil more expensive for holders of other currencies, which can reduce demand. The US Dollar Index (DXY), a measure of the value of the USD against a basket of six currencies, currently trades near 106.90 after hitting a fresh year-to-date high near 107.05.

"Crude futures are trying to establish equilibrium pricing as a rising U.S. dollar index is creating a further headwind, along with a Trump administration that will now have control of Congress, which is likely to roll back most of the Biden administration's energy policies," Dennis Kissler, senior vice president of trading at BOK Financial, said in a note.