- Potential production hikes are facing pushback from other key OPEC members.
- Despite the questionable future of production increases from Russia-Saudi Arabia, Treasury yields and Fed rate hikes are keeping oil under pressure.
Crude oil prices are continuing to test near recent bottoms, with the WTI clipping down into a fresh nine-week low beneath the 64.00 key price level.
The Russia-Suadi Arabia team-up that helped take oil prices back down recently could be heading into an unexpected rough patch, with other key OPEC members voicing their discontent over the recent suggestion that OPEC may lift its current oil production restrictions, with Iran, Iraq, and Venezuela all stating over the weekend that they will reject the production limit hike at OPEC’s upcoming meeting this week in Vienna. Decisions on OPEC production need to be unanimous, and Saudi Arabia may have some tough convincing to do.
Despite the potential challenges to production increases, prices are remaining on the weak side, with US Treasuries and the Greenback both keeping crude prices depressed. With the Fed’s rate hike last week, and the possibility of another two hikes this year, the USD is finding strong support and US Treasury yields are continuing to show intense pressure, with the ten-year yield continuing to bump into the 3% key level, and the rising Treasury yields are pushing oil prices down.
WTI levels to watch
64.00 represents a major level for WTI prices, and a breakdown below this level will quickly see oil tumbling into the last major swing low near 61.80, but a recovery for WTI could see a rebound into 66.50, a level that has proven troublesome for the commodity in both January and March of this year.
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