Crude oil futures markets saw traders scale back their open interest positions for the second consecutive session on Friday, with a decrease of around 14.2K contracts. Volume followed suit and dropped by around 114.6K contracts after two consecutive daily builds.
The West Texas Intermediate (WTI) added to Thursday’s gains on Friday, despite the decrease in open interest and volume. This indicates that the commodity could be headed for a correction in the near future. Analysts are of the opinion that the WTI could revisit the sub-$74.00 mark per barrel, which was the lowest point reached last week.
The crude oil market has been volatile in recent weeks, with prices fluctuating in response to a variety of factors. On the one hand, the OPEC+ group of oil-producing nations have been meeting regularly to discuss production cuts and other measures that could help stabilize the market. On the other hand, the US-China trade war and the global economic slowdown have had a negative impact on oil prices.
Furthermore, the US shale industry has been producing record amounts of oil, which has contributed to a glut in the market. This has put downward pressure on prices, as producers are unable to find buyers for their oil. The situation has been further complicated by the US sanctions on Iran and Venezuela, which have limited the amount of oil that is available in the market.
In addition, the US has also been stockpiling crude oil in its Strategic Petroleum Reserve, which has also contributed to the market being oversupplied. This has led to a situation where the market is not able to absorb any additional supply, leading to a further decline in prices.
Overall, the crude oil market is likely to remain volatile in the near future, as the various factors mentioned above continue to have an impact on prices. Analysts are of the opinion that the WTI could revisit the sub-$74.00 mark per barrel, although it is difficult to predict when this could happen. In the meantime, traders should stay alert and be prepared for any potential market movements.
