- WTI is falling nearly 4% after climbing to multi-year highs.
- Investors are concerned that producers will choose not to participate in production cuts.
- Focus shifts to weekly US crude oil inventory data.
Crude oil prices They rose sharply at the beginning of the week after OPEC + producers failed to agree on the group’s oil production strategy and canceled the meeting. A barrel of West Texas Intermediate (WTI) rose more than 1% on Monday and maintained its bullish momentum to reach its highest level since November 2014 at $ 76.95.
Supply concerns weigh on oil prices
However, with US investors returning from a long weekend, oil came under strong selling pressure and WTI fell to $ 72.92 in the second half of the day before entering consolidation. At the moment, WTI is down 3.5% on the day to $ 73.50 and is still on track to post its biggest one-day percentage loss since falling more than 4% in early April.
Investors appear to be concerned that the United Arab Emirates (UAE) will unilaterally increase its oil production and that other producers will follow suit after Monday’s clash with Saudi Arabia. The United Arab Emirates opposed an extension of production restrictions until the end of 2022 from the current deadline of April 2022.
Later in the week, the American Petroleum Institute (API) and the US Energy Information Administration (EIA) will release weekly crude oil stock data.