Oil Slumps Below $71 as Iraqi Supply Concerns and Demand Woes Weigh
Oil prices plunged after breaking a key technical level, extending losses amid expectations of increased supply from Iraq and a gloomy demand outlook.
West Texas Intermediate crude slid over 2% to trade below $71 per barrel, accelerating its decline after prices breached their 100-day moving average of approximately $71.51. The downturn risks extending oil's weekly losses to five consecutive weeks, marking its longest such streak in over a year.
The commodity has remained range-bound within $5 for the past three weeks due to supply uncertainties. These uncertainties include heightened expectations of an OPEC+ production increase deferral and a drone attack on Kazakh pipeline flows.
Concurrently, US President Donald Trump's tariffs and other policy decisions have dampened demand prospects and fueled inflation concerns among consumers.
OPEC+ delaying its planned 120,000 barrel-per-day production hike – a possibility flagged by delegates – would signify the fourth postponement of the group's plans to restore output suspended in 2022. Currently, the alliance aims to reinstate 2.2 million barrels per day in monthly increments beginning April.
"With prices hovering around $75, we anticipate that the producer group will postpone the commencement of returning withheld oil supply to the market," wrote Citigroup analysts, including Eric Lee. "The decision to increase oil production may only occur if the US intensifies sanctions on Iran amidst potential negotiations."