- WTI Crude oil marks a stellar run-up as OPEC+ shocks markets with surprise output cut.
- OPEC+ members announced voluntary production cut led by Saudi Arabia.
- Risk-on mood, softer US Dollar also propel WTI crude oil prices.
WTI crude oil begins the week with a huge price gap towards the north, jumping to $81.00 during the early hours of Monday’s Asian session. The black gold’s latest rally could be linked to the weekend announcements from the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known collectively as OPEC+.
Also read: OPEC producers announce voluntary oil output cuts
The Oil cartel, led by Saudi Arabia, announced a total of around 1.16 million barrels a day of output cut during the weekend in a surprise move. Following the announcements, the US National Security Council said. “We don’t think cuts are advisable at this moment given market uncertainty - and we’ve made that clear."
Apart from the OPEC+ output cut, the US Dollar weakness and broad risk-on mood also allowed the WTI crude oil price to remain firmer. That said, the US Dollar Index (DXY) marked a three-week downtrend in the last whereas the receding fears of the banking crisis and the latest toll on the hawkish Fed bets allow the riskier assets to remain firmer.
Moving on, the US Nonfarm Payrolls (NFP) for March and the ISM PMIs for the stated month will be important to watch. Also, the US reaction to OPEC+ isn’t welcomed and hence more Strategic Petroleum Reserve (SPR) releases are likely on the way, suggesting a pullback in the Oil price.
Technical analysis
A clear upside break of the five-month-old descending resistance line, now support around $78.30, directs WTI crude oil buyers towards confronting the 200-DMA hurdle surrounding $83.35.
It’s worth noting that January’s high of around $82.70 can offer an immediate upside hurdle to the black gold.
Alternatively, the previous monthly high of nearly $81.00 and an ascending support line from March 20, close to $75.40, are extra filters towards the south.
WTI crude oil: Daily chart
Trend: Further upside expected
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