WTI slumps after Mexico rejects OPEC+ deal, G20 Energy Summit eyed

• WTI settles the week 18% lower as OPEC+ deal gets delayed.
• Mexico rejects 10 million bpd output cuts agreed by OPEC+.
• Day 2 of OPEC+ meeting and G20 Energy Summit in focus.  

After witnessing a solid recovery in the final week of March, WTI (oil futures on NYMEX) resumed its bearish trend and lost nearly 18% this Easter holiday-shortened week.

The black gold had a wild ride over the past week, having hit a weekly high at 28.36 while the lowest level in the week was reached at 22.60. The speculations surrounding a likely OPEC and non-OPEC producers (OPEC+) output cuts deal and Russia’s participation in the global oil pact drove the sentiment around oil.

Meanwhile, concerns over the coronavirus spread intensifying globally and its impact on the economic growth also remained one of the main catalysts behind the oil-price action over this week. As it stands, the virus spread in the global hotspots shows no signs of slowing down.

On the day of the highly anticipated OPEC+ meeting, i.e., Thursday, the US oil enjoyed a massive intraday move of $5. The sharp spike to the multi-day high above 28.00 was eventually reversed and the price tumbled nearly 8% to hit a new five-day low at 22.60.

The sell-off accelerated after it was reported Mexico maintained its opposition to the OPEC+ deal before initially agreeing to it. The OPEC+ sources said:  Mexico is not happy with it a new quota of 1.353 million b/d, as the country plans to unveil a $13.5 billion energy investment package to help state oil company Pemex raise its production to 2 million b/d by the end of the year.”

The OPEC+ reached a deal to cut output by 10 million barrels per day (bpd) while it expected the US and other producers to join in their effort to bolster prices.

Meanwhile, markets are in a holiday mood this Good Friday, however, the G20 energy ministers extraordinary meeting, due later at 1400 GMT, “to ensure energy market stability” and the Day 2 of the OPEC+ meeting will be closely eyed.