Crude Oil prices stabilize after OPEC output hike sends barrel bids lower

• Crude Oil prices are clawing back near-term losses sparked by a planned OPEC output increase.
• WTI briefly plunged below $65 per barrel as global glut fears resurface.
• OPEC is poised to reverse its self-imposed two-year production cut beginning in June.

West Texas Intermediate (WTI) Crude Oil prices are stabilizing on Monday, clawing back near-term losses after the Organization of the Petroleum Exporting Countries (OPEC) announced it would begin stepping up its internal production quotas beginning in June. The move is broadly seen as a way to punish smaller OPEC member nations that flouted voluntary production caps, including Kazakhstan and Iraq.

Global Crude Oil glut looms ahead

Energy markets are still clinging to hope that incoming energy sector sanctions on Russia will sop up the looming oversupply from OPEC production increases. However, hard figures remain elusive, and it remains unclear if the Trump administration will follow through on sanctions against Russia, a known favorite of President Trump. According to data compiled by Bloomerg, Russian energy exports rose to a five-month high in March, and weekly Crude Oil exports from Russia have also risen on a week-on-week basis through the end of April.

WTI price forecast

WTI barrel bids briefly tumbled back below $56.00 on Monday, dipping to a near-term low of $55.14 before recovering ground through the intraday session to the $57 region. US Crude Oil prices remain down sharply from mid-April's peaks near $64.00 per barrel. However, a technical floor appears to be priced in at the $56.00 level.

WTI daily chart