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Oil Traders Should Be Weary Of A Bear Trap

Market Tremors

US benchmark West Texas Intermediate (WTI) crude oil and international benchmark Brent crude oil are on edge as a sudden decline in prices puts traders and investors on alert. Prices have taken a nosedive, falling around 2% on Thursday. This comes on the heels of a near 6% drop in the previous session, marking the most significant percentage loss in both Brent and WTI crude benchmarks since May. Brent futures settled at $84.07, a decline of 2.03%, while WTI came in at $82.31, down 2.3%.

Demand Worries

One of the leading culprits behind the steep fall is growing concern about fuel demand. With government data indicating a sharp decline in U.S. gasoline consumption and JP Morgan analysts noting that we're at a 22-year seasonal low in U.S. gasoline usage, investors are growing increasingly wary. Economic indicators aren't helping either; a slowdown in the U.S. services sector has cast a dark shadow over the future of oil prices.

OPEC+ Decisions

While demand concerns have taken the spotlight, the recent decisions by OPEC+ have added another layer of complexity. Despite market routs, the oil cartel and its allies, led by Russia, have decided to maintain their output cuts. Saudi Arabia will continue its voluntary 1 million barrels per day supply cut through the end of the year, while Russia is keeping its 300,000 bpd voluntary export curb in place. The OPEC+ Joint Ministerial Monitoring Committee solidified these decisions in a recent…

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