WTI dips below $ 59.00 amid pessimistic end to week

• WTI is on track for a second day of losses and has returned to the $ 59.00 level.
• Texas bringing production back online and the US-Iran talks weighed on oil at the end of the week.

The previous month’s futures contracts for the US benchmark for light sweet crude, West Texas Intermediary (WTI), they continued their pullback on the last trading day of the week, shedding 1.27% to $ 59.26. In post-liquidation trading, crude oil futures have fallen back to $ 59.00, although overall they have remained supported before the Asia Pacific session lows around $ 58.50.

Assuming that, with volumes continuing to decline in the next few hours before the close of commodity futures trading at 22:00 GMT, sentiment does not take a drastic turn for the better, the WTI is set to close a second day in a row at lowers it. The past two days have seen WTI retreat more than $ 3 from highs above the $ 62.00 level and the US benchmark for light sweet crude is on track to post losses of more than 1% for the week. In fact, attention in the past two days has been on the more bearish impulses of Texas / Southern State oil production coming back online and the potential of a new US / Iran that could see that lift restrictions on the country’s ability to start exporting crude oil again.

Regarding the former, most of the 4.6 million barrels per day in Texas state crude oil production was shut down amid the onset of the recent “deep freeze,” but most of this is expected to return. be online in a few days as temperatures normalize. . On the latter, recent reports have indicated that the United States may be willing to meet with Iranian officials and negotiate some kind of “confidence-building” agreement that could lay the groundwork for a possible full return to the JCPOA or some kind of new agreement. According to a senior EU official, the EU could act as a kind of deal broker and is said to be working on the possibility of holding an informal meeting of JCPOA members. Therefore, the market has in mind the potential for a return to the market of total Iranian crude oil production. Keep in mind, however, that the White House has said it is unwilling to withdraw sanctions against Iran given its recent nuclear transgressions and recent news from the UN nuclear watchdog, which found uranium particles in two places of interest. Iranians that it says Iran has failed to achieve. explain, you can toughen the US resolve.

Despite the decline in the last two days, WTI crude oil is still trading almost 13% higher in the month and the strong degree of support looks likely in the future due to the positive evolution on the demand side; Covid-19 infection rates continue to decline in key developed markets and vaccine launches continue, increasing the scope for an economic reopening later in the year and an aggressive global economic recovery. Markets are still waiting for vaccines to work and recent news from the UK that Public Health England will release data concluding that vaccines stop two-thirds of infections and transmission will raise hopes that the virus can be controlled. Meanwhile, the US Congress still seems likely to implement at least one bigger fiscal stimulus package, and global central bankers appear determined to keep interest rates at lows and ultra-accommodative monetary conditions. All of the above should mean that 2021 is a very good year for oil demand.

Technical Levels