WTI tumbles almost 10% on Thursday despite agreement on output cut
- Price of WTI barrel retreats 20% from daily high, drops to one-week lows.
- Volatility remains at extreme level despite OPEC+ agreement.
The price of crude oil reversed sharply and tumbled further into the settlement. The WTI barrel traded on Thursday as high as $28.30 and settle at $22.76, a decline of 9%. In the futures market, WTI was trading around $23.30, still making sharp moves, moving modestly away from the low it hit at $22.58.
The slide in prices took place despite the agreement at the OPEC+ to cut output. Iran’s Oil Minister said the cut will be of 10-11 million bps, “apart from the cuts expected of countries such as Brazil, Norway and the US”.
The agreement did not boost prices and contributed to volatility. Production cuts are only a part of the problem, the supply side. The other factor keeping prices depressed is the demand that is expected to decline further as the world heads into recession.
Technical levels
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
