WTI regains $85.00 as OPEC+ members defend supply-cut verdict

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.