Oil prices began to plummet on Thursday afternoon, falling by almost 9%.
WTI slipped 8.68% ET to $ 58.99 a barrel at 4:04 p.m., while Brent slipped 8.01% to $ 62.55 a barrel. This is the largest drop in absolute terms since April 2020, when oil slipped into a negative territory.
Analysts have predicted during the recent price increases, and bulls have indicated that there is more room to run, giving proclamations of an upcoming superbike. Others, more cautious in their prospects, have been warning for several weeks that optimism in the oil markets is unfair.
The recent rally was largely due to OPEC +’s production cuts – or rather, the fact that they agreed to keep production stable in April, instead of increasing production as the market expected. Passing the 3rd a stimulus round in the United States also improved sentiment in the oil market.
But a rising dollar, rising crude stocks in the US, growing fears of a revival in coronavirus cases and concerns about vaccine safety in Europe have proved worthy opponents.
This concern is directly linked to the revival of oil demand. And markets consider this demand picture less favorable today, as evidenced by raw futures contracts showing that the market is declining.
WTI’s pre-month contract is again trading at a discount for next month.
Crude oil WTI April contract is now trading at $ 59.46 a barrel while the May contract is trading at $ 59.57. WTI’s April contract is now $ 5.14 lower on the day.
This is the fifth consecutive day for oil price declines and the largest decline in absolute terms since April 2020
By Julianne Geiger for Oilprice.com
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