WTI remains depressed after biggest single-day decline in one month

• WTI drops as Russia favors winding down of output cuts. 
• The black gold registered its biggest single-day decline in one month on Wednesday.

West Texas Intermediate (WTI) crude, the North American oil benchmark, is extending Wednesday's losses. 

The front-month futures contract is currently trading at $31.55, representing nearly 4% losses on the day. Prices fell by 4.48% on Wednesday, the biggest single-day loss since April 27. 

Russia favors easing of supply cuts

Oil came under pressure on Wednesday and remains on the defensive at press time seemingly due to reports that Russia wants to begin easing production cuts in July, as planned under the OPEC+ output cut deal agreed in April. The agreement to cut the output by 9.7 million barrels per day came into effect on May 1.

With Russia in favor of winding down output cuts, the probability of the group extending the agreement beyond July appears low. 

Apart from the news flow about OPEC and Russia, traders need to keep an eye on rising tension in Hong Kong as China looks to impose new security laws that would end the country’s autonomy. The US has warned that it will impose sanctions on China if the dragon nation moves forward with imposing the controversial law. 

Also, Weekly US oil supply data will be released Thursday - a day later than usual due to Monday’s Memorial Day Holiday. 

Technical levels