Futures on US West Texas Intermediate Crude Oil rebounded on Thursday after an over 12% decline in the prior session, the biggest single-day drop since November, as market players were weighing if key oil producers would increase supply to fill the output gap stemming from sanctions on Russia after its incursion into Ukraine.
Russia is the second-largest crude oil producer worldwide and a key provider of natural gas for Europe.
This supply uncertainty has led to a variety of price forecasts, ranging between $100 and $200 per barrel.
Market players received conflicting signals following remarks from the United Arab Emirates energy minister and the country’s ambassador to Washington. Energy Minister Suhail al-Mazrouei said in a tweet on Wednesday that the UAE was committed to the existing agreement by OPEC+ members to increase oil supply by 400,000 barrels per day every month after drastic reductions in 2020.
Several hours before, oil prices plummeted after UAE’s ambassador to Washington said his country would be urging OPEC to consider higher production in order to fill the supply gap resulting from sanctions imposed on Russia.
Oil traders also took into account moves by the United States to ease sanctions on Venezuelan oil and efforts to secure a nuclear deal with Iran.
Although the UAE and Saudi Arabia have sufficient capacity, other OPEC+ members are still struggling to meet their production targets because of underinvestment in infrastructure.
Meanwhile, the latest EIA data showed yesterday US crude oil inventories had decreased last week, while crude stockpiles in the Strategic Petroleum Reserve had dropped to their lowest level since July 2002.
As of 9:27 GMT on Thursday WTI Crude Oil Futures were gaining 2.13% to trade at $111.01 per barrel. Earlier this week the black liquid rose as high as $130.50 per barrel, which has been its strongest price level since July 2008.
At the same time, Brent Oil Futures were gaining 3.14% on the day to trade at $115.58 per barrel. Earlier this week the commodity rose as high as $138.03 per barrel, which has been its strongest price level since July 2008.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $113.06
R1 – $122.48
R2 – $136.27
R3 – $145.69
R4 – $155.12
S1 – $99.27
S2 – $89.85
S3 – $76.06
S4 – $62.28
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $116.52
R1 – $127.13
R2 – $142.20
R3 – $152.81
R4 – $163.42
S1 – $101.45
S2 – $90.84
S3 – $75.77
S4 – $60.70