WTI falls sharply from multi-year highs, holds above $73
- WTI is falling nearly 4% after surging to multi-year highs.
- Investors are worried about producers opting out of output cuts.
- Focus shifts to weekly crude oil stock data from the US.
Crude oil prices rose sharply at the start of the week after OPEC+ producers failed to reach an agreement on the group's oil output strategy and called off the meeting. The barrel of West Texas Intermediate (WTI) rose more than 1% on Monday and preserved its bullish momentum to reach its highest level since November 2014 at $76.95.
Supply concerns weigh on oil prices
However, with American investors returning from a long weekend, oil came under heavy selling pressure and WTI dropped all the way to $72.92 in the second half of the day before going into consolidation. At the moment, WTI is down 3.5% on a daily basis at $73.50 and remains on track to post its largest one-day percentage loss since falling more than 4% in early April.
Investors seem to be concerned about the United Arab Emirates (UAE) unilaterally ramping up its oil production and other producers doing the same following Monday's clash with Saudi Arabia. The UAE stood against an extension of production curbs until the end of 2022 from the current deadline of April 2022.
Later in the week, the American Petroleum Institute (API) and the US Energy Information Administration (EIA) will release the weekly crude oil stock data.
Technical 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.
