WTI rose by 2.3%, with most other commodities also rising

According to the latest news, West Texas Intermediate (WTI) increased by 2.3%, with most other commodities also rising.

The oil market’s structure also reversed sharply on April 5, with the much-watched spread between the nearest December contracts dropping by nearly $1. The slump implies weakening expectations for the health of the market.

Oil surged 22% in the first quarter as the rollout of vaccines stimulated expectations that demand would recover. Meanwhile, the Organization of Petroleum Exporting Countries and its allies kept controlling supply. Volatility has risen in the last weeks amid waves of the COVID virus in some nations. However, prices have also been sustained by a slew of positive economic data from America.

According to a senior analyst at Danske Bank A/S, Jens Pedersen, the oil market is settling in after the OPEC+ decision on Thursday to start normalizing output.

Oil accelerated its slump after the U.K. warned it may continue limiting foreign travel

According to Citigroup Inc., the gradual nature of the return of OPEC+ supplies will cause a deeper drawdown of global stockpiles in Q2 2021. Notably, banks maintain a positive outlook on the oil market.

Significantly, the potential for a return of Iranian barrels resumes weighing on sentiment. Negotiators from the Islamic Republic and America gather to resurrect the troubled nuclear deal, though the talks face significant obstacles. Additionally, Tehran has insisted on full sanctions removal for it to scale back nuclear activity. Meanwhile, Washington has ruled out any unilateral gestures.

Oil accelerated its slump after the U.K. warned it may continue limiting foreign travel, dampening expectations for a summer travel boom.

Futures in New York slipped by 5.9% on April 5, sending prices markedly below their 50-day moving average. Britain may delay global travel beyond May 17 if COVID infections continue to surge elsewhere worldwide. Remarkably, it will add pressure on the immediate trajectory for consumption as governments struggle to control coronavirus spread.