Oil price red flags are popping up around the world amid correction

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  • Crude oil prices entered a correction, plunging more than 10% from their January highs.
  • While its easy to point fingers at the broader market turmoil, RBC Capital Markets highlights a number of warning signs that could weaken the commodity even more.
  • They include the crowd of investors betting on higher prices, gushing US production, and rising Chinese exports.

Crude oil prices slumped into correction — a 10% drop from their January highs — amid the turmoil that hit stocks over the past two weeks.

But according to commodity strategists at RBC Capital Markets, investors would be wise not to ignore several risks that may drive prices even lower. Short of sounding “alarm bells” in their note on Tuesday, the strategists led by Michael Tran said pockets of the market are getting oversupplied again. That’s problematic because production cuts led by members of the Organisation of…

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