FxWirePro: Oil declines for fourth consecutive week; closing in on targets

An extension of the OPEC/N-OPEC agreement for nine months that aims to reduce supply by 1.76 million barrels per day failed to lift the oil price. A commitment by Saudi Arabia’s oil minister Khalid Al-Falih along with the Russian oil minister Alexander Novak to do whatever it takes to balance the oil market has also failed to push oil prices higher. A brawl in the Middle East that saw nine countries including Saudi Arabia, United Arab Emirates, Egypt, Bahrain severing ties with the island nation of Qatar. But that failed to lift oil prices too as the market remains concerned with the existing supply glut in the market.

The oil price has now declined for a fourth consecutive week and reached the lowest point since April. It not only erased gains made from the speculation of a deal made in May among OPEC and N-OPEC countries, it is also challenging the gains made after first OPEC deal back in November 2016.

We are committed to our outlook that WTI would decline towards $42 per barrel and further possibly towards $38 per barrel, while Brent would decline towards $40 per barrel. WTI is currently trading at $44.7 per barrel and Brent at $2.6 per barrel premium.