WTI holds below $84.00 after the biggest sell-off in a year, OPEC leaves policy unchanged

• WTI prices remain on the defensive near $83.50 on Thursday.
• OPEC and its allies maintained the output policy unchanged through the end of 2023.
• The higher-for-longer US rate narrative weighs on the WTI prices.
• Oil traders await the US Nonfarm Payrolls on Friday for fresh impetus.

Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $83.50 so far on Thursday. WTI trades in negative territory for the third consecutive week and hits the lowest level in two months as investors are concerned about the oil demand outlook.

According to the US Energy Information Administration (EIA) on Wednesday, the weekly US crude oil inventories fell 2.224M barrels for the week ending September 29 from the previous reading of 2.17M barrels drop. The market consensus expected a 0.446 million-barrel decline. During the same period, API reported that crude oil stockpiles declined by 4.21M barrels compared to an increase of 1.586M in the previous week.

At the OPEC Joint Ministerial Monitoring Committee (JMMC) online meeting on Wednesday, the group maintained the output policy unchanged. OPEC and its allies reiterated the joint Saudi-Russian vow to continue its voluntary supply cut of at least 1.3M barrels a day from the two nations' daily output through the end of the year.

Kuwait's oil minister Saad Al Barrak stated on Wednesday that oil markets are heading in the right way by balancing supply and demand, while Deputy Prime Minister Alexander Novak also said joint supply cuts by Russia and Saudi Arabia have helped to balance oil markets.

Apart from this, oil traders turn cautious amid the higher-for-longer US rate narrative. The Federal Reserve (Fed) is likely to raise interest rates one more time this year. This, in turn, exerts some selling pressure on WTI prices. It's worth noting that higher interest rates raise borrowing costs, which can slow the economy and diminish oil demand.

Oil traders will monitor the weekly Jobless Claims report due on Thursday. The attention will shift to the US Nonfarm Payrolls on Friday. The US economy is expected to create 170,000 jobs in September. These events could significantly impact the USD-denominated WTI price. Oil traders will take cues from the data and find trading opportunities around the WTI prices.