Futures on US West Texas Intermediate Crude Oil extended losses on Thursday, as the market braced for increased supply after a compromise between key OPEC producers. Additionally, fuel inventories in the United States, the largest oil consumer globally, increased, while raising demand concerns.
Yesterday both WTI and Brent plunged more than 2% following a report by Reuters, stating that Saudi Arabia and the UAE reached a compromise which could result in a deal to supply more crude oil to a tight market.
Negotiations between members of the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, fell apart earlier in July after the UAE did not agree on an extension of the supply cut deal beyond April 2022.
“The deal will take some time to get finalized, but it seems the UAE will be allowed to produce more output next year,” OANDA analyst Edward Moya wrote in a client note, cited by Reuters.
“It seems OPEC+ will shortly have a plan to raise output and that is welcomed news as surging demand had oil market getting too tight.”
Meanwhile, an official report by the US Energy Information Administration showed on Wednesday that crude oil inventories, excluding the Strategic Petroleum Reserve (SPR), had decreased by 7.897 million barrels during the week ended on July 9th, or at a much sharper rate compared to what analysts on average had anticipated – a drop by 4.359 million barrels. It has been an eighth consecutive weekly decline and also the most considerable one since early May.
On the other hand, US gasoline and diesel stocks rose last week despite lower refinery utilization rates, which put additional downward pressure on prices.
As of 8:33 GMT on Thursday WTI Crude Oil Futures were retreating 1.90% to trade at $71.74 per barrel, after earlier touching an intraday low at $71.68 per barrel. The latter has been the black liquid’s weakest price level since July 8th ($70.76 per barrel). WTI Crude Oil Futures have retreated 2.41% so far in July, following a 10.78% surge in June.
At the same time, Brent Oil Futures were losing 0.55% on the day to trade at $74.11 per barrel, after earlier touching an intraday low at $73.52 per barrel. The latter has been the commodity’s weakest price level since July 8th ($72.14 per barrel). Brent Oil Futures have retreated 0.80% so far in July, following a 7.49% surge in June.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $73.59
R1 – $74.98
R2 – $76.82
R3 – $78.21
R4 – $79.59
S1 – $71.75
S2 – $70.36
S3 – $68.52
S4 – $66.67
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $75.01
R1 – $76.19
R2 – $77.87
R3 – $79.05
R4 – $80.24
S1 – $73.33
S2 – $72.15
S3 – $70.47
S4 – $68.80
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