WTI Crude Oil Trades Cautious, OPEC Production Cut Hopes Fade
Early on Tuesday, WTI crude oil is back to trading under pressure after two days of gains over concerns that OPEC may not extend production curbs even in the face of weakening demand. At the time of writing, WTI crude oil is trading at around $56.50 per barrel.
Crude oil ended Monday’s session 0.6% higher and is sitting slightly above this level for now over hopes that OPEC and allies could enhance crude production curbs to offset declining demand in the wake of poor economic growth. Earlier this year, OPEC+ had agreed to cut production by 1.2 million bpd until March 2020, but crude production rose last month after touching an eight-year low as Saudi Arabia staged a faster than expected recovery in capacity after the drone attacks.
Crude oil prices had made gains over the past couple of days buoyed by encouraging economic data releases from the US and expectations for a trade deal between the US and China. While prices continue to remain supported in hopes of an interim trade deal being signed within this month, there is still uncertainty on the exact date for this to happen.
Crude oil prices can also be influenced in the coming days by Saudi Aramco’s IPO listing at the Riyadh stock exchange. Markets are widely expecting it to be the world’s largest listing as Saudi attempts to diversify its economic interests beyond oil.
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