Oil has fallen for seven straight weeks and is in danger of falling again this week after a $2 decline today.
WTI is trading down $2.07, or -3.0%, to $69.25. The drop nearly erases three days of modest gains and comes ahead of weekly private US inventory data later today and official data on Wednesday.
The long-term thesis of a barrel shortage has been severely strained in the fourth quarter as global inventories built despite large OPEC production cuts. Seasonally, Q1 demand is low so the market is questioning whether inventories will draw at all in Q1. Beyond that, OPEC may start to bring back more barrels, keeping the market in a surplus.
If not, there's a threat that US shale could keep the taps wide open, leaving OPEC in a position where it will need to start a war for market share.
All that said, eight weeks consecutively is a monumentally bad run (the worst in at least five years) and sentiment is extremely poor so it won't take much for a real bounce. The weekly RSI is at the lowest since 2020 at 35. However those hoping for help from this week's inventory data may be left disappointed with talk of a 7 million barrel build.
