WTI stages decisive rebound after slumping below $42
- Crude oil prices fell sharply in early American session but made a U-turn.
- OPEC+ overproduction has reportedly exceeded 2. million bpd in May-July.
- Attention shifts to Baker Hughes' weekly US Oil Rig Count data.
Crude oil prices fluctuated sharply during the American trading hours and the barrel of West Texas Intermediate (WTI) slumped to six-day low below $42 before recovering its losses. As of writing, the WTI was virtually unchanged on the day at $42.70.
OPEC headlines boost volatility
During the first half of the day, the WTI moved sideways in a familiar range below $43. However, following a Reuters' report on OPEC+ oil production levels and demand outlook, WTI lost its traction.
Citing an internal document, Reuters reported that OPEC+ overproduction in May-July period was 2.31 million barrels per day (bpd). Additionally, the document further revealed that OPEC+ in an alternative scenario sees global oil demand falling by 11.2 million bpd in 2020.
On the other hand, easing US-China tensions seem to be helping crude oil prices remain resilient. Earlier in the day, China’s Commerce Ministry spokesman Gao Feng said that China and the US have agreed to go ahead with phase one trade review "in the coming days."
On Friday, Baker Hughes Energy Services' weekly US Oil Rig Count data will be looked upon for fresh impetus. Earlier in the week, the US Energy Information Administration (EIA) announced that crude oil inventories in the US declined by 1.6 million barrels in the week ending August 14th.
Technical levels to watch for