WTI dives to near one-week lows, defends $67.00 ahead of OPEC+ meeting

WTI crude oil witnessed aggressive selling during the early North American session and tumbled to near one-week lows, around the $67.00/barrel mark in the last hour.

The latest leg of a sharp fall was triggered by comments from oil minister Alexander Novak, saying that Russian oil companies are ready to increase production beyond the rates and volumes set by OPEC+. Novak argued that it is important to keep the global oil market balanced, to synchronise output and demand as the market rebounds.

Earlier this Wednesday, OPEC+ made an upward revision to its 2022 oil demand forecast to 4.2 million barrels per day (bpd), up from the previous estimate of 3.28 million bpd. This now seemed to have fueled speculations that OPEC+ could move away from its plan to add 400K bpd, though the chance of such an action is low.

The OPEC Joint Ministerial Monitoring Committee (JMMC) meeting is scheduled at 1500 GMT. Any incoming headlines might continue to infuse some volatility in oil prices and produce some meaningful trading opportunities.

Meanwhile, the emergence of some selling around the US dollar might act as a tailwind for dollar-denominated commodities and help limit any deeper losses for the black gold. The USD struggled to capitalize on its modest intraday gains following the disappointing release of the ADP report on private-sector employment.

The data might have forced investors to push back the likely timing when the Fed would begin rolling back its pandemic-era stimulus and dashed hopes for an earlier lift-off. Apart from this, easing worries about the potential economic fallout from the Delta variant supports prospects for some dip-buying around oil prices.

Technical levels to watch