WTI remains depressed after biggest single-day decline in one month
|- WTI drops as Russia favors winding down of output cuts.
- The black gold registered its biggest single-day decline in one month on Wednesday.
West Texas Intermediate (WTI) crude, the North American oil benchmark, is extending Wednesday's losses.
The front-month futures contract is currently trading at $31.55, representing nearly 4% losses on the day. Prices fell by 4.48% on Wednesday, the biggest single-day loss since April 27.
Russia favors easing of supply cuts
Oil came under pressure on Wednesday and remains on the defensive at press time seemingly due to reports that Russia wants to begin easing production cuts in July, as planned under the OPEC+ output cut deal agreed in April. The agreement to cut the output by 9.7 million barrels per day came into effect on May 1.
With Russia in favor of winding down output cuts, the probability of the group extending the agreement beyond July appears low.
Apart from the news flow about OPEC and Russia, traders need to keep an eye on rising tension in Hong Kong as China looks to impose new security laws that would end the country’s autonomy. The US has warned that it will impose sanctions on China if the dragon nation moves forward with imposing the controversial law.
Also, Weekly US oil supply data will be released Thursday - a day later than usual due to Monday’s Memorial Day Holiday.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.