OPEC Agreement Reached, WTI Crude Pushes $68.00
Shain Vernier • 2 min read
Day one of the OPEC meeting has brought fireworks to the crude oil markets. Upon a planned boost in production being announced at the conference, WTI crude oil ran to the bull. At press time, price is pushing the $68.00 handle.
Details Of Today’s OPEC Agreement
How can an increase to production be the primary catalyst for a bullish breakout? The answer(s):
- Members did not agree to boost production in the traditional sense. They consented to comply with 100% of 2016’s stated output limits. This is very different from “increasing” production relative to capacity.
- Estimates on the actual growth in output vary. While the agreement states an aggregate 1 million barrel/day boost, production levels will depend on each member country. A more accurate estimate is in the 600k-750k barrel/day range.
Energy traders are taking today’s OPEC agreement as a positive toward WTI pricing. While production is slated to increase, it is below expectations. Hence, fresh bids are hitting the August WTI crude oil market in force.
WTI Crude Oil Technicals
The bulls have jumped in with both feet and are dominating today’s trade.
Price has broken above topside resistance on the daily chart and is poised to challenge the $68.00 level. The bullish breakout is the largest since before the yearly high of $72.70 was established in mid-May.
Overview: At press time, August WTI crude has posted a session high of $67.93. Intraday time frames are definitely bullish, led by steep uptrends on the 30 and 60-minute charts. An OPEC press conference is due out at some point during the U.S. session. It has the potential to spike volatility facing energy products. Be on the lookout for its release.
Also, remember that this is only day one of the OPEC conference. Participants are due to meet again tomorrow. If today’s deal is revised or amended during the weekly market close, a gap up or down is probable for the coming Monday open.