WTI: Recovery from four-year low falters above $30 amid Saudi’s price war
- WTI stalls sell-off in Europe, not out of the woods yet.
- Saudi launched price war on Saturday after OPEC+ fallout.
- Focus on Saudi’s move and coronavirus updates.
The offered tone around US oil (WTI futures on Nymex) appeared to have weakened over the last hour, as the bulls looked to extend the recovery momentum above the 30 mark.
However, sellers continue to lurk above the latter, capping any pullback for now. The black gold crashed over 30% to reach the weakest levels since mid-February 2016 at $27.34 after the early sell-off accelerated on a break below the $30 mark - the psychological level.
WTI is on track to book the biggest daily loss since 1991 after Saudi Arabia launched a price war over the weekend following Friday’s OPEC+ deal fallout. Russia rejected the OPEC+ proposal to deepen the oil output cuts to stabilize oil markets hit by the coronavirus outbreak.
Saudi Arabia slashed its export oil prices over the weekend. The Saudi decision to cut prices by nearly 10% was announced on Saturday. The cut heightening the panic across the global markets, already roiled by the coronavirus outbreak.
Citing two people familiar with the country’s oil policy, the Financial Times (FT) reported that “Saudi Arabia will raise production and offer its crude at deep discounts to win new customers next month, which risks sending prices tumbling further.”
Markets will continue to watch out for any updates from Saudi Arabia and Russia for fresh impetus on the prices. Meanwhile, coronavirus-related headlines will continue to influence the oil markets ahead of the US weekly crude supply reports.
WTI Technical levels to watch