- WTI has retreated from last Thursday’s highs above $ 61.50 to current levels around $ 60.
- Although other risk assets are doing well, WTI could be feeling the weight of international concerns about Covid-19.
The previous month’s futures contracts for the US benchmark for light sweet crude oil, West Texas Intermediary or WTI, have been lower at the beginning of the first full week of April, despite gains seen in global stocks and the falling US dollar. WTI is currently trading down around $ 1.20 on the session or down 2.0%, having retraced from last Thursday’s highs above $ 61.50 to trade either side of the $ 60.00 level.
WTI is currently trading slightly higher than the big figure and appears to be getting some support from the 50-day moving average, which currently sits at 59.87. Trading conditions have been poor since the end of the Asian session amid a lack of European market participants due to Easter Monday holidays across much of the continent. The US markets are open and therefore volumes should be slightly higher in the next few hours, although volumes are unlikely to be as high as on a typical Monday, given the number higher than that. usual of US market participants who are expected to take advantage of the long weekend and have this Monday off.
Performance of the day
Last Friday’s blockbuster appears to have been well received by investors in stocks, bonds and currencies; US stocks are heading to new record highs with the S&P 500 now above 4,050 (up 0.9% on the session), US government bond yields have risen (yield to 10 years is back close to 1.72% from below 1.68% last Thursday) and forex markets are generally pointing towards risk appetite (risk-sensitive AUD, CAD and NZD are doing well, anyway).
But crude oil does not share the same enthusiasm as these other asset classes. Crude oil market participants appear to remain concerned about the threat posed by the ongoing third global wave of Covid-19 infections to short-term crude oil demand; India, one of the world’s largest crude oil consumers, saw a record number of new Covid-19 infections over the weekend of more than 100,000 cases on Sunday and the country’s states are tightening closures. The Philippines is extending lockdown restrictions in its key national capital region for at least another week. Meanwhile, South Korea saw a fifth consecutive day of more than 500 new Covid-19 infections. International concerns about Covid-19 are likely to weigh on crude prices for some time, and other key markets such as Europe remain closed as well.
Elsewhere, the crude oil market slump may have something to do with last week’s OPEC + result; As a reminder, the cartel agreed to increase production by 350,000 in May, 350,000 in June, and 441,000 in July. Meanwhile, the Saudis announced that they will gradually reverse their voluntary 1 million barrels per day cut in production by 250,000 in May (bringing their voluntary cut to 750,000 that month), by 350,000 in June (taking their voluntary cut to 400,000 that month). month) and then for the last 400,000 in July (effectively ending their additional voluntary production cuts). Looking ahead to the meeting, the markets did not expect the cartel to put this amount of crude oil back into operation, so this could be affecting prices.
Technical levels
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
