- The barrel of WTI loses more than $5 last week.
- OPEC is said to deepen output cuts.
- Trading volume is likely to stay thin until first week of January.
After recording its lowest weekly close since July 2017 at $45.40, the barrel of West Texas Intermediate failed to stage a meaningful recovery so far on Monday and was last seen trading at $45.35. Despite the latest OPEC headlines, concerns over the potential negative impact of a global economic slowdown on oil demand and the record production levels to major producers continue to weigh on crude oil prices.
During a news conference at a gathering of the Organization of Arab Petroleum Exporting Countries in Kuwait on Sunday, the United Arab Emirates’ energy minister, Suhail al-Mazrouei said that OPEC and its allies could organize an extraordinary meeting to discuss deeper output cuts if the current 1.2 million barrels cut were not enough the balance the markets. “What if the 1.2 million barrels of cuts are not enough? I am telling you that if it is not, we will meet and see what is enough and we will do it,” Mazrouei said, according to Reuters.
Due to the Christmas holiday, the API data will be released on Wednesday and the weekly EIA stock will be published on Friday. However, with the New Year holiday approaching, the market reaction to these data is expected to stay relatively muted.
Technical levels to consider
The initial support for the WTI aligns at $45 (psychological level/Jul. 13, 2017, low) ahead of $43.65 (Jul. 10, 2017, low) and $42.60 (Jun. 26, 2017, low). On the upside, resistances align at $46.75 (Dec. 21 high), $48.30 (Dec. 18 high) and $50 (psychological level).
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