West Texas Intermediate (WTI), the US crude oil benchmark, traded around $65.65 at the start of the Asian trading session on Tuesday (August 5). WTI traded slightly lower after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) agreed to another significant production increase in September.

OPEC+ met virtually on Sunday and agreed to increase oil production by 547,000 barrels per day (bps) for September amid growing concerns over potential supply disruptions related to Russia. The group began increasing production in April with a modest increase of 138,000 bpd, followed by larger-than-expected increases of 411,000 bpd in May, June, and July, 548,000 bpd in August, and now 547,000 bpd for September.

The threat of secondary sanctions on Russian crude could help limit WTI's decline. US Special Envoy Steve Witkoff is expected to visit Russia on Wednesday. Oil traders will be closely monitoring developments on the agreement between Washington and Moscow. However, the impact of any potential move remains uncertain.

"The oil market is still pricing in a low probability of any major decision from the White House regarding Russian oil exports," said Pavel Molchanov, an analyst at Raymond James.

Oil traders are gearing up for the release of the American Petroleum Institute's (API) weekly crude oil stockpiles report, due Tuesday evening. On Wednesday, the Energy Information Administration (EIA) crude oil stockpiles report will be released. (alg)

Source: FXstreet