- West Texas Intermediate crude sliding below key $26 handle ahead of OPEC+.
- Oil prices jumped overnight in anticipation of production cuts.
The price of a barrel of oil in West Texas Intermediate crude is currently trading around the $26 handle, travelling from a high of $26.56 to a low of $25.86. The market was supported on Wednesday in New York with a weekly decline in crude production as well as the anticipation of production cuts as a consequence of OPEC+ meeting today. The sentiment sent crude for May delivery higher by $1.46, or 6.2%, to settle at $25.09 a barrel.
The Energy Information Administration announced a weekly decline of 600,000 barrels a day in domestic crude production from a near-record level to 12.4 million barrels a day for the week ended April 3. In addition, it also reported US crude supplies climbing for an 11th straight week.
All eyes on OPEC+
Meanwhile, Russia is reportedly ready to reduce its oil production by 1.6 million bpd in line with its share in oil production of countries involved in the deal. Indeed, OPEC+ will be the ultimate driver, so all eyes on this. Algerian state news agency, APS, reported that Energy Minister Mohamed Arkab said, “the meeting will undoubtedly be fruitful in order to rebalance the market through measures we will take tomorrow.”
In addition to the OPEC meeting, G20 energy ministers are set to meet on Friday to discuss market stability, and the Texas RRC will meet on April 14th. “While all of this does offer some optimism that a cut can be done, it remains unlikely, in our opinion, that OPEC+ will cut double digits on their own and without commitments from other key producers such as the US,” analysts at TD Securities (TDS) explained.
“Meanwhile with front month contangos over $5/bbl for WTI, and not much better for Brent, the prospect of rolling long positions becomes extremely expensive and is likely to provide another bearish lean as investment demand and bottom picking flows could very well decrease. With that said, CTAs remain well positioned for further downside,” – TDS added.
WTI levels
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