• West Texas Intermediate traded as high as $123.66 a barrel before retreating.
• The sour tone of equities undermines demand for black gold.
• The OPEC+ downwardly revised Russian oil output for the year.

Crude oil prices are in retreat mode after reaching fresh three-month highs. The barrel of West Texas Intermediate hit an intraday high of $123.66, now trading at around $119.38. The initial rally came after the OPEC+ reported that it produced a total of 28.5 million barrels per day in May, down by 176K bpd compared to April.

The organism´s Monthly Oil Market Report also showed that members expect demand to keep rising, while downwardly revised Russian liquids output forecast by 250K bpd, which means they expect the country’s production to contract by 170 bpd on the year. Additionally, OPEC is hopeful that the Chinese decision to lift lockdown measures should increase imports from the country.

The commodity turned south with Wall Street’s opening, as US indexes extend their bearish route amid fears of a US recession and ahead of the US Federal Reserve monetary policy decision. The central bank has been widely anticipated to hike the benchmark rate by 50 bps, although the latest inflation figures pushed market players to lift their bets, now anticipating a 75 bps hike.