Oil prices on both sides of the Atlantic witnessed a sharp downward spike, following comments from oil ministers of leading OPEC producers, suggesting that OPEC is seen building consensus that the output cut deal will be extended for nine months.
The sell-off was triggered in a knee-jerk reaction as markets resorted to ‘Sell the fact” strategy, with a 9-month deal extension already priced-in. WTI dropped almost -1.50% to $ 50.23, while Brent tumbled to $ 52.94 lows.
However, the black gold reversed half the slide over the last hour, awaiting the final outcome from the OPEC meeting, with deeper cuts already off the table, as cited by the Saudi Arabian oil minister.
At the time of writing, WTI loses -0.50% to 51.11, while Brent is down -0.26% to $ 53.90.
WTI technical levels
A break above $ 52 (round number) could yield a test of $ 52.65 (May 19 high) beyond which $ 53 (round number) could be tested. While a breach of $ 50.42/23 (200-DMA/ daily low) would expose $ 49.88 (50-DMA), below which downside opens up for a test of $ 49 (round number).
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