WTI Crude futures are down almost 10% from their highs last week (near $73), testing back to a $65 handle, breaking below critical support levels and testing the major uptrendline…
As Saudi Arabia and Russia signal they will restore some of the production they’ve curbed to drain a global glut, Bloomberg notes that the market awaits a meeting of OPEC and its partners in Vienna late June as extreme positioning starts to get unwound…
“Clearly, the commentary from Russia and Saudi Arabia popped the bubble,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund.
“There’s some legitimate skepticism about whether or not they will follow through. There is going to be nervousness right up until next month’s meeting.”
WTI broke below its 50DMA, is testing its 100DMA and is right at its 12-month up-trend-line…
Talk of rising output from the world’s top two oil exporters wiped out this month’s rally, which Bloomberg noted had been fueled by concerns that supplies from Iran and Venezuela will shrink.
“There’s some discord among the Gulf countries as to whether or not they should increase now or not,” Kilduff said. “There’s some cats to herd.”
Notably, WTI’s weakness is underperforming Brent which remains dominated by geopolitical risk – driving the WTI-Brent spread to over $9…
Its widest since March 2015.
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