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WTI trades below $100, clings to huge intraday losses

  • Oil markets continue to trade erratically and with heavy losses on the day after the US SPR release announcement.
  • 1 million BPD will be released over the next six months, keeping pressure on WTI, which is currently trading near $102.
  • OPEC+ agreed to a production increase of 432,000 BPD starting in May, which helped keep WTI above $100.

Choppy conditions in global oil markets have continued during US trading hours, with prices continuing to trade at steep losses on the day after the White House issued a statement confirming recent speculation of a historic release. of crude oil reserves. The White House said it would release 1 million barrels of crude oil from the Strategic Petroleum Reserve (SPR) every day for the next six months and then replenish the SPR once prices decline. Prior month WTI futures are currently trading at $102.00, just under $5 on the day after finding strong support in the $100 area.

Opposition commentators/politicians accused the White House of timing the statement specifically to try to lower gas prices just before the November midterm elections and, in doing so, jeopardize US energy security. . long-term. Analysts at Goldman Sachs said the move would help rebalance the oil market in 2022, but warned it was not a permanent solution and would “thus not solve the structural supply deficit, which is years in the making.”

The US SPR release aside, crude oil traders have also had plenty of other things to watch on Thursday. As expected, OPEC+ agreed to a production quota increase of 432,000 barrels per day (BPD) from May, resisting continued calls from major oil importing/consuming nations such as Saudi Arabia and the United Arab Emirates. United, raise production at a faster rate. Meanwhile, optimism regarding progress in the Russia-Ukraine peace talks has faded somewhat as Russian attacks continued and officials expressed skepticism. For now, these two factors seem to support WTI above $100.

Technical levels

Source: Fx Street

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