There was little excitement in the oil markets during Tuesday’s trading session; with investors on guard as OPEC and Non-OPEC members discussed compliance levels on their output cut agreement, in Abu Dhabi.
A sense of caution seems to be the theme for the financial markets as trading gets underway for the week, with investors braced and preparing for an incredibly busy week packed with both crucial economic reports and major risk events.
Crude oil’s ongoing oversupply woes reached an ear-piercing crescendo during Tuesday’s trading session as WTI crude plunged into a bear market after growing signs of rising production across the globe. WTI Crude was already extremely sensitive and vulnerable to losses amid the bearish sentiment with reports of an unexpected supply increase by Libya sending prices below $43.
The markets relinquished short-term gains on Friday following the soft retail sales and inflation data and should be poised to edge lower this afternoon as investors re-evaluate the likelihood of an interest rate increase in June. With an air of anxiety suffocating participants who seek risk, and soft economic data from the US and China weighing on sentiment, the “Sell in May and go away” strategy may become a popular choice.