Crude Oil prices continued to decline further despite the fact that OPEC and Non-OPEC members have been active in the media, trying to increase the hopes of stabilizing the market. However, things have just got even more interesting.
Crude Oil Enters Bear Market
Both West Texas Crude and Brent Crude have entered a bear market status, despite December’s production output cut deal and the nine-month extension in May.
Brent Crude is down by -22.2% since the opening price of January 1st and lost more than 23% from this year’s peak as well.
WTI is also down by -22.4% since January 1st as well and lost 23.2% from this year’s peak.
With such move, it looks like the downward trend is likely to accelerate, which is not going to be good news for any of the producers whether in OPEC or Non-OPEC.
Proof That The Extension Is Not a Positive factor
Looking at the chart above, in December 2016, when OPEC announced that they reached a deal between OPEC and Non-OPEC members to cut the production for the first time since the financial crisis, Crude Oil failed to post a new high for this year.
Brent managed to add around $1 only before it traded within a tight range of $7 to $8 until February when the prices started to slide.
When the market does not react to such notable output cut for more than a quarter, don't expect the extension of the same deal would do better.
In May, when OPEC announced the extension decision, Crude prices made the same move. Brent and WTI added around $1 only before they both tumbled to the levels that we are looking at right now.
In percentage, Brent lost more than 18.5% while WTI lost more than 18% since the extension announcement.
Read more: https://www.orbex.com/blog/2017/06/oil-bear-market-continues-for-how-long/
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