The West Texas Intermediary (WTI) crude oil market has been experiencing a downward trend recently, with prices falling below $83.20 per barrel on Wednesday. This decline is largely attributed to diminishing supply concerns and an increase in US Treasury yields.
The Organization of the Petroleum Exporting Countries (OPEC) and its Joint Ministerial Monitoring Committee (JMMC) have reaffirmed their commitment to maintaining crude production cuts until 2024. Key players in the oil market, Saudi Arabia and Russia, have continued to uphold their output reductions and exportation caps.
Global fears of undersupply are being assuaged as gasoline reserves increase and facilities intensify the conversion of crude oil. The US’ Energy Information Administration (EIA) has observed a slowing decrease in US crude inventories, further contributing to the easing of supply concerns.
The WTI market recently underwent a bearish break from a bullish trendline near $93.98, with the Relative Strength Index (RSI) indicating oversold conditions. This shift suggests a potential transition from inventory drawdowns to slight rebuilds by the end of the year, as predicted by JP Morgan’s Natasha Kaneva.
The recent developments in the WTI market highlight the dynamic nature of global oil markets, with various factors contributing to price fluctuations. The sustained production cuts by OPEC and its partners, coupled with increased gasoline reserves and slowed decrease in US crude inventories, are currently influencing the downward trend in prices.
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