Oil prices continued to climb in the early morning hours, with Brent crude futures seeing a boost of 41 cents and reaching a price of $85.34 per barrel – an increase of 0.5%.
Their U.S. counterparts, West Texas Intermediate (WTI), also experienced a similar uptick, rising to $80.83 a barrel. These increases may be indicative of a larger trend and could have implications for industries worldwide.
But as traders eagerly anticipate the next move, the question on everyone’s lips is: Will WTI continue to climb higher?
“West Texas Intermediate” or WTI benchmark is based on oil at a hub in Oklahoma. Though it’s a light oil like Brent, WTI doesn’t quite have the same worldwide influence.“
After gaining over 9% last week, crude oil climbed to a 2-month high on Monday and has continued to hold onto that high ground. This can be attributed to OPEC+ cutting production by 1.1 million barrels per day, which allowed the energy commodity to recover from the loss it suffered in the SVB Financial crash last month.
Joining forces with other OPEC powerhouses like Iraq, the United Arab Emirates, Kuwait, and Algeria, Saudi Arabia is set to scale back oil production by a whopping 500,000 bpd come May. But they won’t be alone in this decision.
Non-OPEC countries Oman and Kazakhstan are also getting in on the action, making this a united front against spiking oil prices.
While the news may be cause for celebration, uncertainties still linger in the market regarding global growth prospects. The Federal Reserve’s determination to enforce strict policies and China’s slow economic recovery have kept the industry on its toes, waiting to see what changes will come next.
Recent reports have revealed that Chinese officials delivered a stern warning to top bankers about their ongoing crackdown on corruption.
Despite the split up of Alibaba group last week bringing optimism for more leniency towards business, it seems the authorities are still determined to stamp out corruption.
Excitement filled the markets on Monday as news broke and prices soared sky-high. In particular, the U.S. benchmark WTI Crude made a triumphant comeback, breaking past the $80 per barrel mark with ease. The energy was palpable, as investors eagerly watched the numbers climb higher and higher. It was a thrilling start to the week that left many wondering what else the market had in store.
Meanwhile in the world of WTI trading, there are signs of a shift towards neutrality. The OVZ volatility index has dipped, hinting that the market might be content with current prices. Additionally, neither of the front two futures contracts are in backwardation or contango, which could indicate a healthy balance between supply and demand.
After a recent surge in oil prices, the RBOB crack spread appears to be petering out. This spread reflects the difference in cost between WTI crude oil and refined RBOB gasoline, and it previously experienced a significant increase as oil prices climbed.
Despite this setback, experts are keeping an eye on the spread as it could still have implications for the energy market in the near future.
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