WTI sheds 3% as sell-off extends below $70 amid OPEC+ deal, risk-aversion
- WTI is heavily sold-off into OPEC+ agreement, damp mood.
- Delta covid strain concerns continue to weigh on risk appetite.
- Risk sentiment will continue to lead the way ahead of US crude supply reports.
WTI (futures on Nymex) is accelerating its decline starting out a new week, losing as much as 3% so far this Monday, as the $70 mark caves in.
The main driver behind the sell-off in the black gold from near two-and-a-half year highs is the compromise reached between the OPEC and allies (OPEC+) over the weekend on oil output policy.
The stand-off between Saudi Arabia and United Arab Emirates (UAE) ended after both sides along with other OPEC+ members agreed to increase the oil supply by 400K barrels per day (bpd) from August.
Meanwhile, the risk-off mood remains at full steam amid mounting concerns over the highly contagious Delta covid variant and its impact on the nascent global economic recovery. The looming virus risks exacerbate the pain in the higher-yielding oil.
Despite the sell-off, the US banking giants such as Goldman Sachs and Citibank remain bullish on crude prices in the near term. Investors now await the weekly US crude stockpiles data due later in the week for fresh trading opportunities.
WTI technical levels to consider