- Oil prices fall modestly on a cautious day in the markets.
- The barrel of WTI went from highs in weeks to daily lows in a few hours.
- Oil market between production cuts and poor economic outlook.
Oil prices are falling modestly on Thursday and are retreating from highs in weeks. Hours ago, they peaked, buoyed by the OPEC+ decision, but recently erased intraday gains.
Risk aversion vs OPEC+ effect
On Wednesday the Organization of the Petroleum Exporting Countries and its allies agreed to reduce production quotas by 2 million barrels. This gave a boost to the price of crude oil, which on Thursday has lost momentum.
The US could not prevent the agreement to cut production. The Biden administration is evaluating easing sanctions against Venezuela, to authorize them to supply US oil companies and help keep the price of gasoline under control.
The rises driven by the OPEC+ agreement led to a barrel of WTI reaching a maximum on Thursday at $88.62 (trading platforms). But then it lost steam and is trading at $87.20, daily lows.
The bad weather in equity marketstogether with an upward rebound of the dollarare putting downward pressure on oil prices on Thursday.
Technical levels
Source: Fx Street
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