West Texas Intermediate (WTI) oil tumbles on supply increase, new lockdowns, although remains range-bound

April 12, 2021 - 1 month ago
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Little changed for West Texas Intermediate (WTI), the benchmark for New York-traded crude oil, as it idles within the broad boundaries between $57.00 to $61.50.

However, there was a modest fall on Friday as production increases and renewed COVID-19 lockdowns in some countries have offset optimism about a recovery in fuel demand.

A decision by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to increase supplies by 2 million barrels per day between May and July have given mixed reviews, while talks about bringing Iran and the United States fully back into the 2015 nuclear deal are making progress, delegates said on Friday, but Iranian officials indicated disagreement with Washington over which sanctions it must lift.

According to news sources, a deal would potentially bring an additional 2 million bpd of supply into the market.

Meanwhile, U.S. energy firms Baker Hughes Co. said in its closely followed weekly report on Friday that the number of oil rigs was unchanged last week.

However, analysts have forecasted more rigs were needed to keep production steady.

The combined oil and gas rig count, an early indicator of future output, rose two to 432 in the week to April 9, its highest since April 2020, Baker Hughes said.

Since this time last year, 602 rigs were operating, the U.S. has shed 170 rigs, Baker Hughes noted.

Although the view is neutral, potentially, the bears could soon seize the opportunity and take the journey lower to challenge the $57.00, with $55.00 viewed beneath.

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