West Texas Intermediate (WTI) crude oil keeps its last days’ rising momentum one day before the OPEC meeting tomorrow. Investors are widely anticipating that tomorrow’s meeting, which will be led by Saudi Arabia, will end with an official announcement for extension of the production cuts for nine more months, as agreed earlier in the year by Saudi Arabia and key producer Russia.
Going a bit back, in November 2016, OPEC and non-OPEC members, including Russia, agreed to reduce the daily output by 1.8 million barrels to reduce oil glut, sending oil prices back to $50 from below $30 a barrel had reached during 2016. It’s worth noting, that during 2016, OPEC’s annual revenues dropped to lows not seen since 2004, due to the low prices of oil backed up from the oversupply.
This agreement is due to expire at the end of June while the oil inventory levels remain well above normal levels, prompting for new cuts with the hope that oil price will remain stable above its current levels.
WTI Crude Oil Continues the Sharp Bullish Run
The WTI crude oil is on course to end the seventh consecutive positive day and measuring more than 17% gains, following the rebound on the $44.00 strong support level. The oil soared more than $7.50 per barrel, since then, and met an almost one-month high at $51.80. Similarly, Brent crude oil is traded for $54.50 per barrel versus $46.74 on May 5th.
Going to the daily timeframe, the WTI climbed above the three simple moving averages (50, 100 and 200) and is establishing well above the rising trend line. In addition, the price is moving towards the $54.10 resistance obstacle with strong movement. The technical indicators on the same short-term chart are moving higher and are strengthening. The RSI indicator is approaching the overbought zone whilst the MACD oscillator surpassed the zero line and is trading in the positive territory.
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