The Crash in Oil Prices Continues, with WTI Heading to $70 Fast
Oil prices reversed by the middle of last week, with WTI failing to climb above $81 and they have been crashing since then.
Oil prices reversed by the middle of last week, with WTI failing to climb above $81 and they have been crashing since then. US WTI crude is heading fast for the $70 level again, while UK Brent crude is heading for $75, with risk sentiment being negative in financial markets today, which sent stock markets down as well.
US WTI crude has fallen by more than $10 in five trading days, or about 10% since last Wednesday, with the OPEC+ meeting conclusion and general negative market sentiment contributing to the dip. UK Brent fell below $80 yesterday for the first time in three months and today it is approaching the $75 level, also down by around 10% since last week.
Crude Oil Chart Daily – Heading to $70 After the 50 SMA Rejection
The current risk-off sentiment is helping Oil sellers to put further downward pressure on Oil prices. This sentiment reflects concerns about macroeconomic causes and geopolitical issues, especially peace talks in Gaza, which have the ability to lessen Middle Eastern hostilities, with Israel announcing that they are ready for peace talks after the call from US president Biden.
Besides that, OEPC decided to wind down some of the quotas. Following the OPEC+ summit, where members agreed to phase out voluntary output restrictions later this year which escalated the decline further. This decision was made by a group of eight OPEC+ countries led by Saudi Arabia and Russia. The staged method will cover a 12-month period, gradually increasing oil production.
Weak economic data have also contributed to the drop in oil prices. Yesterday, the U.S. purchasing managers index showed manufacturing activity, indicating that the recession in manufacturing activity is still ongoing, and today’s JOLTS JOB Opening numbers showed that the downtrend in the labour sector continues, raising concerns about reduced demand in the world’s largest fuel consumer.
A while ago we had the private API crude Oil inventories for last week, which are released a day ahead of the EIA inventories.
API Crude Oil Inventories
- Crude Inventories +4.052 million barrels vs -1.9 million expected
- Gasoline +4.026 million
- Distillates +1.965 million
- Cushing 983,000
- SPR 900,000
US WTI Crude Oil Live Chart
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