WTI Crude Oil regains ground towards $76.00 as the United States dollar confronts problems and American rates fall.
The crude prices for oil are rising, aided by a lower United States dollar. Nevertheless, the WTI value fell as a result of the OPEC+ choice to undertake free supply cutbacks. That were fewer than projected for the Q1 of the year 2024.
Key Points & Considerations
The WTI price is receiving increasing support from the weakening US dollar.
The prices of crude oil were slipping due to weaker output cutbacks.
OPEC+ agreed to cut 2.2 million barrels in the Q1 of the year 2024.
Negative US bond yields add to the stress on the United States dollar.
After the summit, OPEC+ reported an overall decrease of 2.2 million bpd from 8 suppliers in a press release. This involves the prolongation of Saudi Arabia’s & the Russian free cutbacks of 1.3 M bpd. The extra 900 K bpd committed on Thursday includes 200 K bpd in petroleum export restrictions by Russia. While the remainder split between 6 other nations that are members.
The following are the details concerning what the OPEC+ partners committed on for Q1 of 2024:
Algeria agrees to reduce oil output by further 51,000 barrels per day.
Kazakhstan decided to cut its oil production by an extra 82,000 barrels per day.
Saudi Arabia decided to prolong the production reduction of one million barrels per day.
Russia’s Deputy PM Novak stated that the country will increase volunteer oil export curbs by 300,000 bpd. While maintaining the present 500 K bpd. voluntary reductions in output
Oman is going to cut 42,000 barrels further.
Iraq would unilaterally reduce its output by 211 K bpd.
Kuwait plans to decrease output by 135K bpd.
The United Arabic Emirates will reduce output by 163 K bpd.
- The OPEC+ cuts up to 2.2 M bpd by the beginning of 2024, bringing the market back into balance.
- Global mood is negative following the outcome of the OPEC+ summit.
- Goldman Sachs is wary regarding OPEC+’s output plan.
The Crude Oil Market Scenario in the Wake of OPEC+ Moves
Oil’s price is reacting cautiously to OPEC+ output choices announced on Wednesday. both Brent & WTI prices showing conflicting patterns. This falls in the framework of OPEC+’s policy for handling the difficult supply-demand equilibrium. Especially in light of economic estimates for 2024.
Financial Forecasts and Market Psychology
Financial companies and economists, notably Goldman Sachs, are dubious about these changes. The market appears to be quite gloomy. Given the contingent character of such cutbacks and how they might continue under review. Goldman Sachs’ Brent oil projection underscores this prudence, implying a probable fall based on the OPEC+ meeting’s expected results.
Market Prediction: A Gloomy tend in the Face of Concerns
Considering the present market scenario and OPEC+ actions, the crude oil market’s immediate prognosis is gloomy. The open-ended nature of the reduction, anticipated obstacles in member collaboration. With larger economic worries in 2024 each contribute to the above trend.
The market response implies questions concerning these steps’ efficacy. Given the possibility of supply-side excess and poorer economic expansion contributing to the ambiguity. The method with which OPEC+ guarantees adherence, as well as the practical consequence of these cutbacks. could prove critical in deciding which way of crude oil prices in the months to come.
WTI Technical Analysis
The market is negative with WTI Oil futures being traded at $75.96/bbl. A price that’s under the respective 200 & 50- (D-SMA) of $78.07 & $82.51, accordingly. This posture beneath the main MA’s that move signals an immediate and over time negative tendency.
Source: TradingView
Furthermore, the present price is close to the weak barrier mark of $77.43, strengthening the negative attitude. The close closeness to the fundamental support point of $66.85 signals considerable downward action.
