Crude Oil heading back down once again after WTI sees a sharp rejection from $76.50
- Crude Oil rises, then tumbles again in frothy energy markets.
- WTI backslides into $74.50 in exacerbated market volatility.
- OPEC production cuts unlikely to eat away at oversupply amidst declining demand.
West Texas Intermediate (WTI) Crude Oil is seeing a choppy session during Friday’s late-week trading, climbing back towards $77.00 per barrel before falling once more towards $74.50 as oil markets whip. Crude Oil saw a sharp rejection on Thursday as investors remain skeptical the Organization of the Petroleum Exporting Countries (OPEC) will be able to successfully execute recently-announced production cuts.
OPEC recently announced an additional million barrels per day (bpd) reduction in Crude Oil pumping quotas, but markets remain skeptical about the oil cartel’s ability to execute a production cap that is increasingly unpopular with many of its smaller constituent member states.
Lack of agreement over amounts, length of time, and general terms sees fossil fuel investors raising eyebrows as OPEC leaves itself no real method of enforcing compliance with the opt-in cuts, which are expected to run through the first quarter of 2024.
With OPEC’s meager million bpd production cut unlikely to chew through slumping global Crude Oil demand, oil barrel supply overhangs are expected to exacerbate in the coming months.
According to the US Energy Information Administration (EIA), US Crude Oil reserves climbed even further for the week into November 24th, adding 1.6 million barrels to current Crude Oil stocks. The number represents a notable decline from the previous week’s 8.7 million barrel addition, but it still overshot the market’s hopeful forecast of a 933K barrel drawdown.
WTI Technical Outlook
WTI Crude Oil is heading back into the low end on Friday after a cautious recovery gets cut short. US Crude Oil saw a sharp rejection from the 200-day Simple Moving Average (SMA) near $78.00 this week, and WTI is set to head into the Friday market close on the back foot.
Crude Oil has seen a rough, volatile, and lopsided consolidation phase lately, cycling in rough trade between $78.00 and $75.00 per barrel. A bearish extension from here will require significant momentum to crack the downside barrier near $74.00, while a topside swing will need to land somewhere closer to the 50-day SMA near the $82.00 handle.
WTI Daily Chart
WTI Technical Levels
Author
Joshua Gibson
FXStreet
Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.
