West Texas Intermediate (WTI) crude oil prices are stabilizing on Monday after a sharp drop, recovering some of the near-term losses. The price rebound follows the Organization of the Petroleum Exporting Countries (OPEC) announcement that it will increase its internal production quotas starting in June. This decision is widely seen as a response to smaller OPEC member nations, such as Kazakhstan and Iraq, who have exceeded their voluntary production caps.
Energy markets are still holding on to the hope that new energy sector sanctions on Russia will help manage the oversupply expected from OPEC’s increased production. However, concrete details remain unclear, and there is uncertainty about whether the Trump administration will follow through with sanctions on Russia, a country with which the President has had a complex relationship.
Russian energy exports reached a five-month high in March, with weekly crude oil exports also increasing through the end of April, according to data from Bloomberg. On Monday, WTI crude oil prices briefly dipped below $56 per barrel, hitting a near-term low of $55.14 before recovering to around $57 per barrel. While still down significantly from the mid-April highs of $64 per barrel, the $56 mark appears to be acting as a technical support level for prices.
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