WTI snaps 7-week winning trend, trades near $47.90
- WTI fell 2% last week on renewed coronavirus concerns.
- Oil has ended a seven-week winning run.
- Russia to support oil output hike by OPEC+.
West Texas Intermediate (WTI) crude fell by 2.05% last week, ending a seven-week winning run. At press time, a barrel of oil is changing hands near $47.90, representing a 0.7% drop on the day.
The US Congress passed the much-anticipated economic relief bill last week. The European Union and Britain reached a Brexit deal, avoiding the worst-case scenario of new tariffs and quotas after Dec. 31.
While oil rallied on Wednesday, the upswing fell short of completely erasing the weekly loss seen in the first two trading days. The emergence of a mutant coronavirus in the UK triggered the sell-off in oil and other risk assets early last week.
Oil could remain under pressure during the final days of 2020, as last week's hammer candle indicates bull fatigue. Prospects of production hike by major producers in 2021 could also add to bearish pressures around oil prices.
Russian Deputy Prime Minister Alexander Novak said last week that Russia expects to support an increase in oil production by a group of major producers, known as OPEC+, of another 500,000 barrels per day (bpd) from February at the next month's summit of the leading global oil producers. The cartel announced a record output cut of 9.7 million barrels per day in April after a coronavirus-induced lockdown sent prices crashing. The deal took effect on May 1. Since then, the OPEC+ has progressively reduced the cuts and is expected to release an extra 500,000 bpd into the market in January.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
