Oil Prices Sink for Seventh Week Amid Uncertainty Over the Extent of the Output Cuts Agreed by OPEC+

For the seventh consecutive week, oil prices experienced a downward trend. This is largely due to uncertainty surrounding the extent of output cuts agreed upon by OPEC+. The West Texas Intermediate (WTI) crude oil prices witnessed a 3.8% decline for the week, hovering around $71 per barrel. This represents an aggregate loss of almost 20% over the past seven weeks. Crude oil funds lost 2.47% week-over-week bringing their year-to-date performance to -4.05%.

To bolster prices, OPEC+ had announced additional production cuts. However, these reductions will be voluntary, which has sparked scepticism regarding their full implementation by OPEC+ producers. Such doubt adds another layer of complexity and instability to already fluctuating global oil markets.

Compounding this situation further is recent US petroleum data indicating a larger-than-anticipated increase in gasoline inventories at a time when US crude production has reached record highs. The synchronicity of these events could potentially exacerbate market imbalances and place additional pressure on oil prices.

As an illustration, the WisdomTree Brent Crude (BRNT) and the WisdomTree WTI Crude Oil ETC (CRUD) lost 4.90% and 5.18% over the week, respectively.

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