- WTI fades a bounce once again amid broad risk-aversion.
- Uncertainty over OPEC+ output cuts, US stockpiles build weigh.
- Russia’s Novak said oil market could face a shortage in July.
WTI (July futures on Nymex) is ranging in the familiar trading band near mid-36s so far this Thursday, having failed yet another upside attempts just shy of the 37 mark.
At the time of writing, the US oil is down nearly 2% to trade at 36.60, having dropped for the first time in five trading sessions on Wednesday. The bearish momentum around the black gold is mainly on the back of the uncertainty on the OPEC and its allies (OPEC+) oil output cuts extensions after Saudi Arabia and Russia failed to agree on holding the meeting.
Adding to the anxiety, some OPEC sources said that the decision on the output cuts extension would be dependent on the other countries pledging to deepen the cuts. Those countries have been not complying to the OPEC+ deal.
The prices came under further selling pressure following a build in the US gasoline and distillate stockpiles, as per the latest data published by the Energy Information Administration (EIA) on Wednesday.
In the European session on Thursday, the barrel of WTI saw a spike to session highs of 36.88, in a knee-jerk reaction to the upbeat remarks from the Russian Energy Minister Alexander Novak. Novak said that the July oil market deficit may be 3-5 million barrels per day (bpd).
However, it was quickly reversed after Reuters quoted some OPEC sources, saying that the OPEC+ meeting is still possible this week if Iraq and other countries that are not complying, pledge to improve the compliance.
In the day ahead, the OPEC+ meeting related headlines will continue to drive the oil price action while broad-based US dollar bounce could also likely keep the traders cautious.
WTI technical levels to watch
“A downside break of the triangle’s support, at $36.25 now, can fetch the quote to an ascending trend line from May 27, currently around $35.60. In a case where the oil benchmark keeps the downside below $35.60, 200-HMA level of $34.55, will be the key to watch. Meanwhile, a sustained run-up past-$38.30 will enable the bulls to fill the gap below March 06 low of $41.22,” FXStreet’s Analyst Anil Panchal noted.
WTI additional levels
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.