WTI drops toward $73 on demand worries, OPEC+ impasse
- Crude oil prices turn south following a two-day rally.
- Saudi Arabia and Oman call for continued OPEC+ cooperation.
- Spread of coronavirus delta variant revive concerns over unsteady energy demand recovery.
Crude oil prices staged a strong rebound ahead of the weekend and the barrel of West Texas Intermediate closed the last two days of the week in the positive territory, gaining more than 3% in that period. After edging higher toward $75 during the Asian trading hours on Monday, however, WTI lost its traction and dropped all the way to $73.14 before recovering modestly. As of writing, WTI was down 1.4% on the day at $73.60.
Renewed concerns over the spread of the coronavirus delta variant delaying reopening efforts in major economies and weighing on the energy demand outlook seem to be hurting crude oil prices at the start of the week.
Meanwhile, in a joint statement published on Monday, Saudi Arabia and Oman praised the efforts of the OPEC+ for stabilizing balancing oil markets despite the week demand due to the pandemic. Additionally, the Gulf states stressed the need for continued cooperation of producers to support the stability of oil markets. Nevertheless, this statement doesn't seem to be having a significant impact on crude oil prices.
Oil: Three possible Paths for OPEC+ – BMO
Later in the week, the American Petroleum Institute's (API) and the US Energy Information Administration's (EIA) weekly crude oil stock data will be looked upon for fresh impetus.
Key levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
