WTI regains $85.00 as OPEC+ members defend supply-cut verdict
|- WTI crude oil pares the biggest weekly loss since early August, renews intraday high of late.
- Most OPEC+ members defend output cut decision after the White House criticized the move.
- DXY pullback adds strength to oil’s recovery amid a sluggish week-start.
- China trade numbers, updates from CCP can entertain intraday buyers.
WTI crude oil picks up bids to renew intraday high around $85.30 as bulls cheer the latest US attack, verbally, on the OPEC+ decision and the response from the oil producers. In doing so, the black gold consolidates the biggest weekly loss in 2.5 months.
Ever since the Organization of the Petroleum Exporting Countries and allies including Russia, known collectively as OPEC+, countries ignored the US push for a smaller output cut, the White House is at loggerheads with Saudi Arabia. The criticism gained a response from the major OPEC+ members including United Arab Emirates, Kuwait, Bahrain, Oman and Algeria in recent days.
“OPEC+ member states lined up on Sunday to endorse the steep production cut agreed this month after the White House, stepping up a war of words with Saudi Arabia, accused Riyadh of coercing some other nations into supporting the move,” mentioned Reuters. The news also adds that the United States noted on Thursday that the cut would boost Russia's foreign earnings and suggested it had been engineered for political reasons by Saudi Arabia, which on Sunday denied it was supporting Moscow in its invasion of Ukraine.
In response, Saudi King Salman bin Abdulaziz said, per Reuters, that the kingdom was working hard to support stability and balance in oil markets, including by establishing and maintaining the agreement of the OPEC+ alliance. “His comments were backed by ministers of several OPEC+ member states including the United Arab Emirates,” adds Reuters.
Elsewhere, a softer start of the US Dollar Index (DXY) also helped the black gold to pare recent losses. That said, the DXY prints mild losses at around 113.00 by the press time. The greenback’s latest losses could be linked to the cautious optimism in the UK, after the latest political upheaval and comments from the Bank of England (BOE) Governor Andrew Bailey.
Moving on, a light calendar may restrict WTI moves but the geopolitical tensions emanating from Russia, China and recently from Saudi Arabia due to the OPEC+ moves, could keep the short-term buyers hopeful. That said, China’s monthly trade numbers and updates from the yearly Congress could also offer more directions. However, oil buyers should remain cautious amid the broad recession fears and hawkish central banks.
Technical analysis
Recovery remains elusive unless crossing the previous support line from September 27, close to $88.00 by the press time.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.