Crude Oil Sideways Trading Continues – OPEC+ Cuts Production

[[WTI]] crude oil prices are flashing red and representing losses on the day but are still near 12-week highs after the OPEC+ agreed to unexpected and substantial output cuts.

During Friday’s meeting, Saudi Arabia agreed to provide 400,000 BPD of their cuts, a significant supply cut beyond what was agreed with fellow OPEC+ members, if OPEC+ averaged its part of 1.7 million bpd through the 1st-quarter of 2020. Crude prices surged on the news, with the US WTI jumping 7.3% on the week. It was WTI’s most significant weekly gain since mid-June. UK Brent gained 3.1% on the week.

The data came even as China and Washington try to reach a phase one trade deal that has so far remained difficult ahead of a December 15 deadline, when additional tariffs will be imposed on Chinese goods.

The week started with the weak sentiment, although the data shows China’s crude imports surged to a record high, revealing just how deep the sentiment is set in the market regarding the US-China trade dispute that has blocked global growth and oil demand.

Still, United States output has increased since the OPEC+ cuts were first introduced in 2017 in an attempt to reduce a supply glut that had long weighed on prices. American output has increased even as the drill count has fallen, reflecting more efficient well extraction.


Daily Support and Resistance
S3 54.59
S2 56.71
S1 57.89
Pivot Point 58.84
R1 60.01
R2 60.96
R3 63.08

WTI crude oil prices are consolidating around 58.75 resistance area. Crude oil has entered the overbought zone as we can see in the Stochastic, and a bearish retracement seems imminent. On the lower side, immediate support is likely to be found around 58. Whereas, the bearish breakout of 58 can trigger further selling until 57.55 area. In case bulls decide to keep trading higher, we may see WTI testing 58.95 and 59.45 areas. Good luck!

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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