WTI drops 1% to test $ 63 amid mixed signals on global supply
- Souring risk appetite combined with mixed signals on global supply drags oil southwards.
- All eyes on the US weekly supply reports for fresh direction.
WTI (oil futures on NYMEX) resumed its Friday’s bearish momentum and hit fresh five-day lows at 63.23 in the European session, having consolidated the downside in the Asian trades.
The black gold ran into fresh offers as the US-China trade optimism faded in Europe and the risk-sentiment turned cautious, despite broad-based US dollar weakness. Moreover, markets remain wary of the future oil price-direction amid mixed signals on global supply, with the US leading edge indicators suggesting oil output growth firming up.
On the other end, the OPEC and its allies could decide to extend the output cuts when they meet in June. Adding to this, the Russian news agency, Interfax, reported that Russia cut its oil output by 150,000 bpd so far this month.
Further, markets continue to weigh in the weekend’s comments by the Russian Finance Minister Siluanov, citing that Russia and OPEC may decide to boost production to fight for market share with the United States but this would push oil prices as low as $40 per barrel.
In the day ahead, the prevalent risk sentiment on the Wall Street will continue to drive the oil price-action amid a lack of significant US economic news, as all eyes remain on the upcoming US weekly fuel stocks data due later in the week.
WTI Technical Levels