WTI recovers from multi-week lows
US West Texas Intermediate (WTI) crude oil prices showed some resilience below the $67.00 round figure and attracted some buyers at the start of a new week.
The commodity is currently trading just below mid-$67.00s, up 0.60% for the day, and for now, appears to have snapped a three-day losing streak to a three-week low hit on Friday.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, last week decided to delay a planned supply increase by three months to April and extend a full halt to cuts by one year to the end of 2026. Moreover, the worsening Russia-Ukraine war, coupled with the overthrow of Syrian President Bashar al-Assad by rebels, kept the geopolitical risk premium in place and acted as a tailwind for crude prices.
Furthermore, signs of resilience in the US economy, along with hopes that US President-elect Donald Trump’s expansionary policies will boost fuel demand, provided some support for the black liquid.
Meanwhile, Saudi Arabia’s price cuts to Asian buyers highlighted concerns about slowing demand from China – the world’s largest oil importer. Moreover, concerns about potential oversupply could cap any meaningful upside in Crude prices.
Furthermore, a closely followed report by Baker Hughes on Friday showed that the number of oil and gas rigs in use in the US hit their highest since mid-September last week. This suggests increased production from the world’s largest crude producer and may further contribute to keeping Crude prices subdued. Hence, it would be prudent to wait for strong follow-through buying before positioning for any further upside move in the commodity.
Source: FXStreet
