WTI declines from highs initially touched, but remains above $ 46.00

• Crude oil markets were shaken on Monday, hit by swings in broader macroeconomic sentiment.
• WTI has dropped from European morning highs at $ 47.40 to $ 46.50 since the start of the US session.

Before the start of the US session, WTI crude oil futures the first month reached highs for the day just below $ 47.50. However, the crude oil complex sold off drastically after the NYMEX open (at 14:00 GMT), even briefly falling below the $ 46.00 level, before recovering back to current levels around $ 46.50, about a dollar below previous highs but still modestly higher on the day.

Crude oil markets hit by swings in sentiment

Crude oil markets initially started the day on the front foot in line with a broader risk appetite, fueled by hopes for the vaccine after the FDA approved the Pfizer vaccine and hopes for Brexit after the stocks were extended. conversations.

However, news that London would return to Level 3 lockdown amid the spread of a new, more virulent strain of Covid-19 and threats from the Mayor of New York to send the city back into full lockdown seemed to weigh on the complex. . European early morning news that major eurozone economies Germany and the Netherlands will tighten economic restrictions in January probably didn’t help either. Meanwhile, OPEC’s monthly oil market report downgraded its forecast for demand growth in 2021 by 350,000 barrels per day, adding to the pessimistic shift in confidence.

Elsewhere, some localized supply disruptions were reported over the weekend, with an explosion hitting a ship just outside the Saudi port of Jeddah and a landslide damaging a pipeline carrying crude to the second-largest refinery. from Iran. This news has not given crude oil a lasting boost, perhaps due to reports from Iran’s Oil Ministry that it plans to increase production by almost 70% to 4.5 million bpd next year if the incoming Biden Administration lifts the country’s export ban.

Meanwhile, the OPEC + Joint Ministerial Monitoring Committee (which monitors cartel members’ compliance), originally scheduled for later this week, has been postponed until January for undisclosed reasons. As a reminder, the cartel agreed at the beginning of the month to gradually reduce production cuts starting in January.

Looking ahead, Tuesday’s private inventory data and then Wednesday’s official inventory data will be closely scrutinized, as will the International Energy Agency’s (EIA) monthly oil market reports, which will be released at 10:00 AM. 09: 00GMT on Tuesday. Otherwise, crude oil markets are likely to reflect changes in the broad appetite for macroeconomic risk.