As of 12:10 a.m. EDT, WTI crude prices were down 2.45% to $ 71.57 and Brent crude was trading down 2.16% to $ 72.92.
Prices plunged on Tuesday, dragged down by uncertainty over global oil supplies and the strengthening US dollar in afternoon trading.
“The risk of a no-deal increasing non-compliance, with the White House urging compromise, a rapidly spreading virus variant, and a heavily overbought market all helped trigger the fix which was then fueled with additional fuel.” by a stronger dollar, ”Saxo Bank said in a statement. morning note Wednesday.
“While the long-term outlook looks bullish, short-term uncertainties can lead to heightened volatility, especially given the time of year when the summer holidays are in full swing, removing cash from absent traders. ”Said the bank’s strategic team.
On Wednesday, oil prices reversed earlier gains and traded lower in morning US trading as the US dollar strengthened again. A stronger US currency makes it more expensive to buy crude for holders of other currencies.
The oil market continues to assess the impact of the current OPEC + impasse on supply at a time when summer demand is on the rise. The Biden administration has also called on OPEC to settle its internal disputes and start bringing more oil to markets and easing crude oil and gasoline prices.
Today, traders will also expect the weekly industry estimate of crude oil stocks in the United States by the American Petroleum Institute (API). Analysts are forecasting a 3.9 million barrel reduction in commercial crude oil inventories for the week ending July 2, according to Reuters.
Meanwhile, “there will probably still be a lot of noise around what OPEC + could do in the coming weeks, which means volatility is likely to remain,” ING strategists Warren Patterson and Wenyu Yao.
By Tsvetana Paraskova for OilUSD
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