- WTI drops as Saudi Arabia and Russia delay emergency meeting.
- Reversal higher cannot be ruled out as financial markets are reporting a risk reset.
West Texas Intermediate (WTI) oil is trading in the red on Monday, as a lingering dispute between top exporters Saudi Arabia and Russia is keeping the bulls at bay.
The decline could be associated with the decision by Saudi Arabia and Russia to delay the planned emergency meeting to discuss output cuts to Thursday from Monday. The Kingdom would host the meeting via video conference and the decision to delay was taken to allow more time to bring more producers on board, according to Reuters.
Even so, oil is operating on slippery grounds. Investors are likely worried that an agreement would remain elusive due to the lack of participation from the US, the world’s largest oil producer.
President Trump informed markets last week about potential output cut delay between OPEC and Russia, sending oil prices sharply higher. The US benchmark jumped over 30 percent last week to register its biggest weekly gain on record.
However, on Saturday, Trump described OPEC as a cartel and threatened to levy tariffs on foreign oil, boosting doubts over the prospects for an agreement.
That said, losses could be reversed during the day ahead, as the equity markets are showing signs of risk reset with the number of coronavirus cases in the US, Italy and Spain slowing down over the weekend.
At press time, the US benchmark is trading near $26.80 per barrel, representing a 5.3% drop on the day. Prices hit a low of $25.85 early Monday.
Meanwhile, a barrel of Brent oil is changing hands near $33.25 – down 4.7% on the day.
WTI Technical Levels
Resistance: $29.11 (session high), $35 (4H 200-MA)
Support: $24.70 (4H 100-MA), $24.37 (10-day average).
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