- WTI kicks off the week on a negative note after finishing Friday 1% higher.
- OPEC+ agreed for the gradual oil output increase, Saudi Arabia hiked the price for Asia.
- Strong NFP-led US dollar strength and Europe’s covid concerns weigh on oil.
WTI (futures on NYMEX) is reversing a brief dip below the $61 mark, as buyers remain on the defensive amid holiday-thinned trades on Easter Monday.
A sense of caution prevails across the markets amid surging coronavirus cases worldwide, with the renewed lockdowns in France and India tempering the prospects of faster global economic recovery. The concerns also emerge on the oil demand recovery, which weighs negatively on the black gold.
Further, the sentiment around the WTI barrel also appears to be weighed down by a broadly firmer US dollar, courtesy of a massive surge in the country’s Nonfarm Payrolls.
Although fresh reports suggesting that Saudi Arabia has hiked its oil prices for shipments to customers in its main market of Asia, help put a floor under the US oil. Saudi’s hike in oil price for Asia signals the kingdom’s confidence in the region’s economic recovery.
Meanwhile, the oil output policy decision from OPEC and its allies (OPEC+) continue to offer support to the bulls.
The OPEC+ reached an agreement to gradually ease the production cuts, by increasing output by 350,000 barrels per day (bpd) in May, 350,000 bpd in June and 400,000 bpd in July.
Looking ahead, the covid updates and the US weekly oil supply reports will be closely eyed for fresh direction on oil prices. In the meantime, thin trades and minimal volatility amid Easter Monday could exaggerate the moves.
WTI technical levels to watch