WTI Crude Oil Rose Above Mid-$24.00 – Saudi Arabia Promises Deeper Production Cuts
Arslan Butt • 1 min read
Today in the Asian trading hours, WTI crude oil prices climbed to $24.50 while representing 1.5% gain on the day as Saudi Arabia showed a willingness to deepen output cuts in June in order to support the disturbing market, as we know, the oil market is currently fighting with the oversupply issues which is caused by the coronavirus-induced demand destruction. On the other hand, intensified tensions between the United States and China on the trade deal could be weighing on the oil market and could turn out to be one of the key factors that can keep a lid on any additional gains in the oil prices. WTI Crude oil prices are currently trading at 24.67 and consolidating in the range between 24.23 and 24.82.
As per Saudi Arabia’s decision, they would cut production by an additional 1 million barrels per day (bpd) in June, slashing its total production to 7.5 million bpd, down nearly 40% from April. The United Arab Emirates and Kuwait also showed a willingness to eliminate another 180,000 barrels per day of supply from the market whereas they said that these production cuts would be added additionally apart from the deal signed by OPEC+, a group of Saudi Arabia and Russia, in April to cut production by 9.7 million barrels per day.
Moreover, the oil market could also be weighed down by downbeat comments by most observers in which they said that the big recovery in oil prices is yet to happen as demand is expected to remain weak due to the coronavirus-led economic downturn.
WTI Crude Oil – Trade Setup
US oil is trading at 25.40 within an ascending triangle pattern, which is providing triple top resistance at 26 along with support at 25.10 and 24.10. While bullish breakout of 26 may lead to WTI prices towards 26.75. Good luck!