WTI’s recovery from three-week lows has stalled, owing to a cautious start to the week.
Last week, the oil bulls were saved by upbeat EIA stock data and a risk-on mentality.
As the Delta variety flares up over the world, Covid concerns remain a problem.
After the recovery ran into offers just shy of the $75 barrier, WTI (futures on Nymex) has headed south towards the middle of the $74 level.
The mixed market tone at the start of a new week, as well as a pause in the US dollar’s sell-off, appear to be putting a stop to the recovery mode in the US. Furthermore, rising covid instances in the Asia-Pacific area, as well as their impact on global economy, pressure on higher-yielding oil.
The black gold is currently trading at $74.56, practically flat on the day after ending the week in the red.
Last week’s strong recovery in the WTI price from three-week lows of $70.76 could be linked to a larger-than-expected drop in US weekly oil stocks, according to the Energy Information Administration (EIA) data released on Thursday.
Meanwhile, a standoff between OPEC and its allies (OPEC+) over a possible increase in oil output contributes to the price rise. Despite a three-day meeting, the United Arab Emirates (UAE) rejected a planned eight-month extension to OPEC+ output cuts, resulting in a breakdown in the discussions.
The US consumer statistics, weekly crude inventories, and covid updates will all be actively watched for new trade opportunities in the coming weeks./n
