- WTI rebounds amid a decline in the US dollar, ahead of OPEC’s monthly report.
- A likely OPEC + deal and falling US crude supplies weigh on oil prices.
- Covid concerns and China’s slowdown in growth are keeping investors nervous.
The WTI (Nymex futures) is attempting a solid rally from near the $ 71.70 region and rises back above the $ 72.00 level during the European session on Thursday, helped by renewed weakness in the US dollar in general.
You cannot rule out a profit taking after the recent slump and ahead of OPEC’s key monthly report, which is expected to include the cartel’s outlook on the oil market for 2022.
Black gold fell almost 2% on Wednesday on rising expectations for tighter supplies following a Reuters news report that Saudi Arabia and the United Arab Emirates (UAE) have reached a compromise agreement in a showdown over OPEC and its allies (OPEC +) for an adjustment of crude oil production.
Meanwhile, the Energy Information Administration (EIA) reported that US crude reserves fell for the eighth week in a row last week, exacerbating the pain in the price of WTI. Crude oil reserves fell 7.897 million barrels last week against expectations of a draw of 4.359 million barrels, the EIA reported yesterday.
Despite the spike in price, US oil remains vulnerable amid rapid spread of Delta variant of covid globally and concerns about slowing growth in China, the world’s second largest oil consumer. Risk sentiment in the market is likely to keep upside attempts in higher yielding oil limited.
Next of relevance to oil investors remains OPEC’s monthly report and sentiment on Wall Street. Additionally, Fed Chairman Jerome Powell will testify again today on the Monetary Policy Report, which could affect USD price action.
WTI 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.
