On Tuesday, oil futures were at risk of extending their losing streak to a fourth session. This continued decline can be attributed, in part, to skepticism regarding the ability of OPEC+ to deliver on additional production cuts early next year.
Price Action
- West Texas Intermediate (WTI) crude for January delivery was down 9 cents, or 0.1%, at $72.95 a barrel on the New York Mercantile Exchange.
- February Brent crude, the global benchmark, was down 16 cents, or 0.2%, at $77.87 a barrel on ICE Futures Europe.
Market Drivers
Last week, crude prices experienced consecutive losses after OPEC+ producers agreed to voluntarily cut approximately 2.2 million barrels a day (mbd) of crude from the market in the first quarter of next year. This figure includes an expected extension of Saudi Arabia's 1 mbd voluntary output cut and Russia's 300,000 barrel a day cut to crude exports.
However, the voluntary nature of these cuts has left traders skeptical about whether or not producers will comply. The recent remarks made by Saudi Arabia's energy minister indicating that the first-quarter cuts could be extended provided little lasting support.
Moving forward, analysts at Sevens Report Research have expressed concerns about the heavy price action in oil. If there are no positive or bullish market catalysts in sight, they predict a potential test of the 2023 lows in the $67/barrel area for WTI.
More Articles
All Rights Reserved © 2024
Post a comment