Since the beginning of this week, Crude Oil prices has been declining gradually, reaching critical technical levels.
This is despite the fact that OPEC sent out few remarks to the media, speculating a possibility to extend the production cut deal, which expires in June of this year.
However, these remarks were not enough, Crude prices edged higher for a limited time only, before it continues to decline again later today.
One of the reasons behind the recent decline after OPEC member’s remarks, Russia stated clearly that they couldn't rule out the participation in any extension of December deal, which means that tensions between OPEC and Non-OPEC members is likely to rise ahead of June.
No Catalyst To Support The Prices
We have been saying this over the past few months since Crude Oil prices were trading within a tight range since the beginning of this year.
There is no fundamental catalyst enough to support the prices above $50 barrier, whether in Brent or WTI Crude.
The prices need action and not remarks. This is exactly what happened back in January of last year when the prices were significantly low, OPEC noted that the members would meet to agree on freezing the production.
Yet, the deal came in 12 months after (December). Now they are probably doing the same thing. The prices are declining, and OPEC rushed to support through remarks to keep the hopes open for a possible action in the future.
However, this time, it might be different.
Read more: https://www.orbex.com/blog/2017/03/crude-oil-tumbles-ahead-of-the-us-crude-oil-inventories/