WTI battles $73 after OPEC+ panel sees risk of oil market imbalance after April 2022

After a mode3st uptick on Tuesday, WTI (futures on Nymex) is back in the red, as the bears test the bullish commitments just below the $73 mark.

The renewed weakness in the US oil comes after Reuters divulged details from a confidential report, citing that an OPEC+ panel, the Joint Technical Committee (JTC) has warned of "significant uncertainties" and the risk of a potential global oil market imbalance after April 2022.

Key takeaways

Under a base scenario, OECD oil stocks would stand at 96 million barrels and 125 million barrels below the 2015-2019 average for the third and fourth quarters of 2021, respectively.

In 2022, a significant increase is seen, leading to an overhang of 181 million barrels by the end of the year.

The black gold has turned south once again, as it continues to face rejection above $73.50, despite a drawdown in the US crude stockpiles, as per the latest American Petroleum Institute (API) report published late Tuesday. The API report showed that the US crude inventories fell by 8.15 million barrels last week.

The Delta covid variant-induced risks of derailing global economic recovery and fuel demand growth concern also undermine the sentiment around WTI. Markets now look forward to the Energy Information Administration’s (EIA) weekly crude stocks report and the prevailing risk trends for fresh trading opportunities in oil.

At the time of writing, WTI drops 0.20% to trade at $72.86, heading back towards weekly lows of $71.97 reached on Tuesday.

WTI technical levels to consider