WTI balances in a $103.00-104.00 range on supply worries and cuts in growth forecasts

• WTI is juggling in a $1 range on disruption in the demand-supply mechanism.
• The IMF has lowered the global growth forecasts to 3.6% from January’s expectation of 4.4%.
• Blockades on Libya’s oil fields and export terminals have reduced the global oil supply by 0.55 million bpd.

West Texas Intermediate (WTI), futures on NYMEX, is continued with its lackluster performance from the past few trading sessions. Trading sessions are settling in a minor range as investors are unable to decide whether to act upon supply worries or to underpin the fears of expected slippage in the demand catalyst.

Supply in the oil market is really tight as the OPEC+ (OPEC allies + Russia) are failing to meet their production targets. Russian oil is being prohibited by the Western leaders after its invasion of Ukraine, which forced major countries to impose sanctions on the former. An embargo on Russian oil by Europe is in discussion and carries a significant impact if it takes place. Meanwhile, additional cuts in the global supply of oil after Libya showed reluctance in oil supply amid political crisis and blockades on major oil fields has escalated pressure on the oil market. The barricades on Libya’s export terminals are resulting in the loss of more than 550,000 barrels per day (bpd).

On the demand front, a significant cut in the global growth forecasts by the International Monetary Fund (IMF) has raised clouds of uncertainty over the aggregate demand prospects. The IMF has reduced the worldwide growth expectations to 3.6% from the previously expected figure of 4.4% announced in January. Also, the lockdown measures in China due to the resurgence of the Covid-19 have produced headwinds for oil prices.