Oil prices continued to fall sharply on Wednesday, July 7 as Brent broke through the next support levels, down 2.04% to $72.93/bbl, while WTI plunged 2.1% to $71.58/bbl. As a result, the benchmarks retraced to mid-June levels.
The mood on the oil market following the breakdown of the OPEC+ meeting has been dour, as the market again doubted for the first time since March 2020 that OPEC+ is an effective instrument for regulating prices. Bearish sentiment was exacerbated by a third wave of the Covid pandemic in a number of Asian countries and in Russia, while the US Energy Information Administration decreased its world oil demand growth forecast in 2021 by 80,000 bpd to 5.33 mln bpd and increased its forecast for US oil production this year by 20,000 bpd to 11.1 mln bpd.
Today the decline in oil prices on pessimistic news has picked up momentum, with Brent down 1.2% and close to breaking through the next support level of $72/bbl, while WTI is off 1.5%, slipping below $71/bbl. Our Brent price forecast for today is $71.8-73/bbl.