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(Bloomberg) -- Oil fell to the lowest closing price this year after the breach of a key technical level accelerated losses driven by the possibility of increased flows from Iraq, weakening the prospects of supply constraints that have gripped the market recently.
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West Texas Intermediate slid almost 3% to end the session at $70.40 a barrel, the lowest settlement price since Dec. 26. The drop deepened after prices dipped below their 100-day moving average of about $71.51. Crude has now fallen for five straight weeks, the longest streak in more than a year.
Crude has been trapped in a roughly $5 range for the past three weeks because of an uncertain outlook for supply, including increasing expectations that OPEC+ will delay a planned production increase and a drone attack that threatened Kazakh pipeline flows. At the same time, US President Donald Trump’s rapid-fire tariff actions and other policy decisions have dimmed the outlook for demand and boosted US consumers’ expectations for long-term inflation.
OPEC+ postponing its 120,000 barrel-a-day output hike — a move delegates are flagging as a possibility — would mark the fourth time the group delayed plans to revive production halted in 2022. At present, the alliance aims to restore a total of 2.2 million barrels a day in monthly increments, starting in April.
“Given prices in the mid-$70s, we continue to anticipate that the producer group postpones the beginning of bringing back withheld oil supply to market,” Citigroup Inc. analysts, including Eric Lee, wrote in a note. “The decision to bring back more oil to market might only come if the US exerts more sanctions pressure on Iran amid potential negotiations.”
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