Oil prices drifted lower at the last trading session of the week. Oil traders are currently going short after OPEC cut its demand forecast and the International Energy Agency said the market was still overloaded with energy supplies.
At the time of writing this report, Brent crude futures dropped 0.6% at $60.80 a barrel having dropped 0.50% on Thursday. West Texas Intermediate futures plunged by 0.6% at $57.88 a barrel, after falling by 0.8% on Thursday.
Both global oil benchmarks closed on Wednesday at their highest levels in more than 11 months after a nearly record-setting run of consecutive daily gains
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on prevailing fundamentals weighing on oil prices.
“After two downward corrections from Brent’s mid $61’s on two consecutive days, it suggests the markets got positioned a bit peaky especially after the IEA delivered a reality check and revised down its global oil demand forecast for 2021 and warned the market recovery is fragile.
“The oil market is a very sentiment-driven beast.
“There might be a growing sense that commentary and analysis got slightly too far over its skis as the price corrects upwards even though the data does not suggest a significant change in the near-term outlook. As such the IEA release provided the market with a vital sensibility check.”
Bottom Line; Energy experts anticipate it will be critical for OPEC+ to put political differences aside and remain focused on delivering the coordinated action that the market needs.