WTI hits the highest since November 2014 at $76.98, then retreats
- WTI clinches over six-year highs just shy of $77 as OPEC+ talks fail.
- OPEC+ failed to reach a deal, abandoning its planned meeting on Monday.
- US dollar’s rebound and profit-taking fuels a quick retracement in oil.
WTI (futures on Nymex) is on a corrective pullback below $76.50, having taken out the 2018 highs at $76.90 on its way to reaching the highest levels since November 2014 at $76.98.
The main driver behind the relentless surge in the US oil is the failed talks amongst OPEC and its allies (OPEC+) held on Monday. The alliance abandoned the meeting after a failure to reach a deal on the output policy for the third time, in light of the objections from the UAE.
The UAE objected to a consensus reached by the rest of the OPEC+ members to increase oil output by about 2 million barrels a day (bpd) from August to December 2021. The OPEC+ talks fallout highlights souring relations between its two core members, leaving oil markets grappling with tighter supplies when compared to the expected demand growth.
However, the quick retracement in the black gold comes after the price faced rejection at the $77 threshold. Investors took that as an excuse to book profits, given the recent upsurge. Additionally, resurgent demand for the US dollar across the board also helped trigger the pullback in WTI price from multi-year tops.
Next of note for the oil markets remains the US ISM Services PMI and its impact on the dollar, which eventually influence the USD-denominated WTI. Further, the sentiment on Wall Street will be closely eyed as full markets return this Tuesday.
WTI technical levels to consider