WTI falls below $53 as recovery remains fragile
- Coronavirus uncertainty weighs on risk-sensitive commodities on Friday.
- Saudi Arabia is reportedly considering a break from oil production alliance with Russia.
- Coming up: Baker Hughes' weekly US Oil Rig Count.
Crude oil prices post decisive recovery gains in the last two days and the barrel of West Texas Intermediate (WTI) rose to its highest level in nearly a month at $54.62 but struggled to preserve its momentum. As of writing, the WTI was trading at $52.95, down 1.38% on a daily basis.
The rising number of coronavirus infections outside of China and disappointing macroeconomic data releases from Japan keep investors on edge and force them to reassess the potential negative impact of the epidemic on the global economy and the energy demand.
Commenting on crude oil movements, "market participants who benefited from the price rise in recent days might prefer not to go into the weekend with a long position," UBS analyst Giovanni Staunovo told Reuters.
Trouble in OPEC+?
In the meantime, The Wall Street Journal on Friday reported that Saudi Arabia was considering a break of its alliance with Russia on crude oil production amid disagreements over the coronavirus' effects on the oil market. "Saudi Arabia, Kuwait and the UAE are holding talks this week to discuss a possible collective output cut of as much as 300,000 barrels a day," added The WSJ's Summer Said and Benoit Faucon.
Later in the day, Baker Hughes' weekly US Oil Rig Count data will be looked upon for fresh impetus.
Technical levels to watch for