Crude oil prices saw heavy selling pressure this week, with the WTI contact on pace for the biggest five-day drop since mid-March. Worries about slowing global growth and the follow-on headwinds for energy prices linked to the spread of the notorious Delta variant of the Covid-19 virus have been compounded by a lingering standoff over output levels between Saudi Arabia and the UAE.
The two powerhouse producers are struggling to agree on the appropriate size of a production increase for the OPEC+ group of top exporters, a forum that includes the OPEC cartel itself as well as like-minded external members (notably Russia). Traders are seemingly starting to worry that continued disagreement may see the consortium fracture, bringing on an output free-for-all that floods the market and sinks prices.
