WTI crude oil price CFDs opened this week’s trading with a $6.92 weekend gap following the breakdown of OPEC+ talks last week. The commodity’s spot price dropped even lower to $27.48.
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A meeting was called between the Organization of Petroleum Producing Countries (OPEC) and Russia (OPEC+) in Vienna on March 5 and 6. The goal was to come up with a solution for dropping crude oil price which was down by over 20% at the time. With the coronavirus outbreak causing disruptions in businesses and limitations on travel, demand for the commodity has been significantly lower.
However, negotiations turned sour. Russia did not agree to higher production cuts proposed by Saudi Arabia. It would have meant that the number of barrels of oil produced per day will be reduced by 1.5 million. In response, the world’s largest oil exporter declared an oil price war. Beginning next month, Saudi Arabia will boost oil production to over 10 million barrels per day. The country’s national petroleum and natural gas company, Saudi Aramco, also began offering discounts to customers in Asia, the US, and Europe. Instead of working with the cartel to collectively boost crude oil price, Saudi Arabia is now looking to make the most for itself by capturing a bigger market share.
WTI Crude Oil Price Outlook
As of this writing, WTI crude oil price CFDs is trading around $27.92. This is also the price level where it bottomed on January 2016. Signs of reversal could mean that crude oil price may soon recover its losses to its previous support at $44.30. A bullish run can be triggered by renewed talks between OPEC+ members. Another scenario would be for Saudi Arabia to announce more conservative production hikes.
On the other hand, if the supply of oil surges next month, we could see crude oil price fall to its 2002 lows at $23.13.
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