Crude Oil/WTI: Oil higher on report of long-term alliance and softer USD
- Non-OPEC countries including Russia may prolong alliance with OPEC beyond 2018.
- Oil prices are higher partial is also helped by lower US dollar and risk-on reflation sentiment.
Crude oil (WTI) is now trading around 61.50 in pre-New York session, edging up by almost 0.23% on Friday. WTI prices are well off the Thursday's low of 59.71 as reports of OPEC-NOPEC long-term alliance coupled with the US dollar falling lower and risk-on reflation sentiment.
As par reports, quoting UAE energy minister, OPEC and NOPEC oil producers (including Russia) may be preparing a long-term alliance on production control to be effective by December 2018. OPEC-NOPEC may also build oil capacity buffers to temper any wild price upswings in oil due to a weak dollar.
As par this week’s EIA data, US crude output hit a record 10.27 million barrels per day making it bigger producer than Saudi Arabia, just behind Russia. The US crude and gasoline inventories also rose last week.
Oil found support earlier in the week after major oil producers such as Saudi Arabia signaled a committed partnership between the OPEC and NOPEC producer such as Russia in their efforts to eliminate about 2% of global supply.
All eyes may be now on the US Dollar during the US session as well as on the Baker Hughes Oil rigs data, which was at a multi-year high of 791 last week.
Technical view
Technically, oil now has to sustain over 62.15 for a further rally towards 62.80-63.05 and 63.55-64.85 zone in the coming days. Positional support is now around 61 and 58 area.
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