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  • WTI under pressure, back below $40 psychological round number.
  • OPEC+ continue to signal a willingness to revise their planned tapering.

The price of US oil is down some 2.9% at the time of writing having traded between a low of $39.07 and a high of $40.55 on the day. 

Oil is down on concerns about the rising infections of COVID-19 around the world, stalling recovery in demand as travel and mobility broadly plateau.

Prices also fell despite the threat of supply disruption in the US Gulf. Hurricane Delta has weakened to a Category 2 storm, but it had already forced about 1.7mb/d of output in the Gulf of Mexico to shut last week. 

Eyes on OPEC

Meanwhile, OPEC+ continue to signal a willingness to revise their planned tapering of the historic output deal. 

Analysts at TD Securities explained that while the group of producers have signalled as much in the last meeting, by opening the door to an extraordinary meeting, this also comes amid stalling demand growth and rising Libyan production following a brokered ceasefire.

The analysts also explained that significant uncertainty remains with respect to the US election’s impact on the domestic energy policy and international policy, particularly surrounding the Iran nuclear deal and fracking policy. 

”In this context, OPEC+ is behaving as we would expect — the OPEC put is mitigating downside risks, while upside risks remained underpriced in our view. The right tail remains fat, as a continued economic normalization and covid-19 management could create a set-up for an upside surprise. ”

WTI levels