WTI consolidates below $68 amid dollar rebound, OPEC supply cut ease

WTI trades with gains on Wednesday in the pre- European session.
Crude oil prices touched 2-year high after OPEC+ reconfirm gradual supply increase.
Iranian oil production, Rising US dollar limiting factor for WTI.

Rekha Chauhan Independent Analyst

Crude oil prices trade on a higher note, albeit with less aggressive momentum on Wednesday. The prices move in a very narrow trade band.

At the time of writing, WTI is trading at $67.87, up 0.22% for the day.

The appreciative move in the US Dollar Index (DXY), which indicates the performance of the greenback against six major rivals, keeps the gain limited for the black gold for the time being. The US dollar was last seen trading at 89.91, up 0.10% for the day.

WTI zoomed to two-year highs on Tuesday, near $68.85, when OPEC members decided to curb supply ease in July, as per April’s decision to return 2.1 million barrels /day to the market between May and July.

The global growth outlook fuels the energy demand. Crude oil prices have jumped more than 30% in the year.

The global economy is recovering from the pandemic and is expected to grow by 5.8% revised higher from the earlier 5.6% as forecasted by the Organisation for Economic Cooperation and Development. However, the rising coronavirus cases in ASIA-Pacific, despite slowing down in India, pose a threat for WTI.

Meanwhile, increased supply from Iran could outweigh the supply-demand balance.

Having said that, OPEC members have not decided on any production policy beyond July, and the group will meet again on July 1 to assess the market situation.

As for now, the US dollar dynamics continue to influence WTI prices.

WTI additional levels

Author

Rekha Chauhan

Independent Analyst

Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.

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