Oil prices began to plummet on Thursday afternoon, dropping nearly 9%.
WTI was down 8.68% to $ 58.99 a barrel by 4:04 PM ET, while Brent crude was down 8.01% to $ 62.55 a barrel. It is the largest drop in absolute terms since April 2020, when oil slumped into negative territory.
Analysts have flipped expectations during the recent price rally, as the bulls signaled that there is more room to run, prompting the announcement of an upcoming breakout cycle. Others, more cautious in their outlook, warned for two weeks that the optimism prevailing in oil markets was unjustified.
The recent rally was largely on the back of OPEC + production cuts – or rather the fact that they agreed to keep production stable in April, instead of increasing production as the market had expected. Passage 3Research and development The stimulus round in the United States also boosted the sentiment of the oil market.
But the rise in the dollar, the increase in crude oil inventories in the United States, the growing fears of a resurgence of Coronavirus cases and concerns about the safety of vaccines in Europe have proven the importance of the rivals.
These concerns are directly related to the return of demand for oil. Markets are looking at this demand picture as less favorable today, as evidenced by crude oil futures that show a market downturn.
The forward month WTI contract is trading again at a discounted rate for the following month.
WTI crude oil for April is now trading at $ 59.46 a barrel, while the May contract is trading at $ 59.57. WTI April contract is now down $ 5.14 intraday.
It is the fifth consecutive day of low oil prices and the biggest drop in absolute numbers since April 2020
Written by Julian Geiger for Oilprice.com
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