WTI has been on the back foot for most of the day amid a sell-off on Wall Street. Adding to the downside has been the fact that OPEC+ is at loggerheads about whether to further ease output restrictions. WTI continues to gradually make fresh intra-day lows and is now hovering not far to the north of the $47.00 per barrel mark, having failed a meager attempted recovery back above the $48.00 level midway through Monday US trading hours. At the time of the Monday futures close, WTI had lost 85 cents on the day and was trading around 1.8% lower. The drop marked a roughly $2.50 or 4.9% reversal from earlier highs set during the European session at $49.80. A sell-off on Wall Street that dragged global equities lower with it also took a toll on highly equity market correlated risk assets such as crude oil. Traders chalked up Monday’s risk-off move to position squaring/profit taking by market participants concerns about irrational exuberance (after all, US stock markets opened at all-time highs and crude oil hit fresh post-pandemic highs) and nerves ahead of Wednesday’s two Senate election races in Georgia. Market participants heavily long stocks and crude oil likely saw elevated prices and incoming risk events as a good reason to book some profit. OPEC+ at loggerheads Also likely weighing on crude oil markets on Monday was signs that OPEC+ remains at loggerheads regarding whether or not to further ease output cuts in February. The cartel met on Monday, but the meeting ended without agreement and officials are now expected to meet again at 15:30GMT on Tuesday. The divide seems to be running along these lines; Russia and Kazakstan want to begin tapering output cuts, with the Russian Energy Minister suggesting a further 500K barrel per day output hike, while the rest of the cartel favours extending current production cuts. Moreover, Russia has also reportedly asked for a change in the baseline average index for the stockpiling of oil, looking to move the period from which the baseline average is calculated from 2010-2014 to 2015-2019. The Saudi Arabian are reportedly leading the calls for the cartel to maintain current production cuts, citing “fragile” demand. Geopolitics in focus? A few developments on the Middle Eastern geopolitical front, though not seemingly having any direct influence over the price action on Monday, are worth noting. Firstly, the US appears to have brokered a de-escalation in tensions between Qatar and its neighboring countries. Saudi Arabia is to open its land border to the country and airspace to Qatar and Bahrain and Egypt will lift their blockade on the country. Meanwhile, tension with Iran continue to escalate; Iran seized a South Korean tanker full of chemicals on Monday, which has prompted the South Koreans to send an anti-piracy unit to the area. The US has roundly condemned Iran over the incident and accused the country of threatening freedom of navigation in the Strait of Hormuz and of seeking to extort sanctions relief. This comes after the US abruptly reversed a decision to bring a US aircraft carrier back from the Middle East amid a rise in threats from the Iranian regime over the weekend. The USS Nimitz will now remain in the Middle East. The US is on edge about a potential Iranian attack against its interests in the region after a recent assassination of a high profile Iranian nuclear scientist (which has not been directly linked to the US and instead been blamed on Israel) and just after the one-year anniversary of the US’ assassination of Iranian General Soleimani. Separately, the Iranian army is reportedly set to commence major drone exercises on Tuesday. Meanwhile, the country is coming under intense pressure from the EU, who are still signatories of the Nuclear Pact signed back in 2015, over its intentions to enrich Uranium to 20%. While Middle Eastern geopolitics has taken a back seat in terms of driving the price action in crude oil markets to themes such as the pandemic and its impact on demand and the response to the pandemic of OPEC+, a resurgence in tensions in US President Donald Trump’s final days of office is worth watching out for. Relations with Iran are expected to improve under the Biden administration. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next NZD/USD stays depressed below 0.7200 amid virus fears FX Street 1 year WTI has been on the back foot for most of the day amid a sell-off on Wall Street. Adding to the downside has been the fact that OPEC+ is at loggerheads about whether to further ease output restrictions. WTI continues to gradually make fresh intra-day lows and is now hovering not far to the north of the $47.00 per barrel mark, having failed a meager attempted recovery back above the $48.00 level midway through Monday US trading hours. 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