WTI crude oil prices have fallen below $66, marking the first occurrence since September. This week has experienced a notable decline of $4 in crude oil, with around half of that drop happening today.
The decrease has brought prices near the September 2024 low of $65.27, potentially leading to further reductions towards the 2023 spike lows. If these levels are breached, prices could approach those seen during the pandemic in 2021.
Opec Output Decision
OPEC+ is considering its decision to increase output by 170,000 barrels per day for April, as profits from this additional oil may be outweighed by the current price fall.
This latest price movement indicates a shift in the market that requires attention. The drop below $66 is not just a number—it represents a break in a level that had held firm for months. Given that crude is now near the lowest point seen in September, further declines may be on the horizon. If that threshold fails to hold, attention will turn to levels last tested in 2023. A failure there would bring prices into territory not seen since the pandemic-era volatility of 2021.
With OPEC+ weighing whether to proceed with an increase of 170,000 barrels per day in April, its decision carries added weight. The intention behind raising output was based on an expectation of steady or higher prices, yet the recent downturn may prompt a reassessment. Additional supply in a fragile market could add more downward pressure, especially when current prices already challenge some producers’ profit margins.
We have seen a steady stream of macroeconomic data that supports this downward move. Recent indications of slower global demand, compounded by a stronger dollar, add layers of pressure. Refiners are also adjusting their buying behaviour, with some holding off purchases in anticipation of further price weakness. This all contributes to a short-term outlook where buyers are hesitant, weighing the risks of stepping in too early against the possibility of even lower levels ahead.
Technical Market Outlook
Technical factors offer little reassurance at this stage. Current pricing has already tested a major support zone, yet momentum favours the downside. If sellers maintain control, another wave lower becomes increasingly possible. The next target rests in the 2023 low range, with further breaks potentially opening the door to levels reminiscent of the drastic declines witnessed in 2021.
Market participants should closely monitor OPEC+ discussions, as any shift in planned production levels could alter the near-term direction. The ability of producers to adjust to the latest drop will be critical in shaping what comes next. For now, the price movement suggests heightened caution among buyers, while sellers remain emboldened by the downward trend.
