WTI aims to surpass $70 mark, bolstered by Putin-Xi meeting and US deposit guarantee

• WTI Price Rebound: Relief rally amid US intervention in banking turmoil.
• Russian President Putin welcomed the Chinese proposal for de-escalation in Ukraine.
• OPEC struggles to maintain elevated oil prices despite production cuts.

WTI prices experienced a sharp rebound after finding support around the $64 mark. This relief rally was fueled by US authorities' intervention to address the ongoing banking turmoil. US Treasury Secretary Janet Yellen stated on Tuesday that the government is prepared to intervene and provide deposit guarantees to all small US banks if needed amidst the banking crisis.

In addition, at the conclusion of Chinese President Xi's state visit to Moscow, a joint statement was issued. Russian President Putin welcomed the Chinese proposal of a 12-point paper calling for a de-escalation and eventual ceasefire in Ukraine, although it lacks details on how to end the war. Putin suggested that Chinese proposals could form the basis of a peace settlement in Ukraine, but noted that the West and Kyiv were not yet prepared.

Both of these developments positively impacted risk appetite, causing WTI prices to surge toward the $70 mark.

On the Organization of the Petroleum Exporting Countries (OPEC) front, Russian Deputy Prime Minister Alexander Novak announced on Tuesday that Russia will maintain a 500,000 barrels per day oil production cut until the end of June. In light of the current market situation, the decision to voluntarily reduce production by 500K bpd will remain in effect until June 2023.

Despite numerous efforts from OPEC nations, they have been unable to keep oil prices at elevated levels. Major oil traders and energy hedge funds, such as Andurand Capital, have argued that the current oil price downturn is speculative and not based on fundamentals. It will be important to observe how OPEC addresses these corrective declines in oil prices.

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