Crude oil prices closed the last trading day of the week on a bearish note. The prices dropped by more than 1% on Friday as the global economy continues to falter due to renewed COVID-19 restrictions in some vital economic hubs around the world.
Brent crude futures settled at $44.35 a barrel, down 55 cents or 1.2%. Also, America’s West Texas Intermediate futures settled at $42.34 a barrel, falling by 1.1%.
Brent fell about 1% for the week, while WTI saw a weekly rise of nearly 1%.
It seems like the current market observation concerning the steep decline in volatility in the crude oil price continues to hold. The oil Vix measure of volatility is now back to mid-February levels.
Stephen Innes, Chief Global Market Strategist at AxiCorp gave insights on OPEC+ strategy in stabilizing crude oil prices. He said:
“The Joint Ministerial Monitoring Committee (JMMC) continued to focus on reigning in laggards, which should be supportive for prices. And although Iraq has made progress but remains above quota, Nigeria is still significantly over-producing. It has been given until August 28th to deliver detailed plans for coming into compliance and over-compensating for their failure to cut production so far.
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“Industry reports estimate that 1.2mb/d of additional cuts through August and September are needed to offset oversupply to date, implying OPEC+ cuts fall to 8.9mb/d in the current phase instead of the 7.7mb/d target.
“But with enforcement tactics reduced to merely public smearing of laggards or a very unlikely disbanding of the agreement, the proof will need to be in the pudding as it remains critical that non-compliant members toe the line to bring the markets closer to equilibrium.”