OPEC+ Supply Cuts, US Stimulus Hopes Send WTI Crude Oil Higher
WTI crude oil is starting the brand new trading week on a bullish note, with prices being boosted by optimism surrounding extension of
WTI crude oil is starting the brand new trading week on a bullish note, with prices being boosted by optimism surrounding extension of deeper supply cuts by OPEC+ countries even as the possibility of more stimulus measures in the US supports expectations for faster economic recovery. At the time of writing, WTI crude oil is trading at around $57.43 per barrel.
The weakness in oil demand has been balanced by Saudi Arabia’s commitment to implement an additional 1 million bpd supply cut in February and March. This has helped erase some of the concerns surrounding falling demand in the wake of the fresh lockdowns and restrictions being announced in some countries, especially across Europe.
WTI crude oil prices have also been boosted by a weakness in the US dollar, which makes it more affordable for holders of other currencies to buy oil. The US NFP report which released late last week disappointed markets, revealing an addition of only 49k jobs against a forecast of 50k jobs; however, this spurred hopes among traders that the US will roll out more fiscal stimulus measures soon.
Although, gains in crude oil remain limited as US producers are considering increasing their output as prices climb higher. In addition, oil demand across parts of Asia and Europe remain lower due to the latest round of lockdowns that governments have imposed to contain the spread of the coronavirus pandemic.
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