WTI Crude Oil Takes Bids Around $40.00 – OPEC Production Cuts in Play
Arslan Butt • 2 min read
WTI crude oil prices flashed green and rose to the highest level since March 6, around above $40.55, mainly due to the news surrounding the OPEC+ agreement to extend the global production-cut accord. Additionally, the reason for crude oil’s gains could also be attributed to the price-positive news from Saudi Arabia and Iraq. At the moment, WTI crude oil prices are currently trading at 40.08 and consolidating between 38.83 and 40.44. The market risk-on sentiment in the wake of Friday’s upbeat US and Canadian employment numbers also boosted crude oil prices.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, mostly known as OPEC+, showed willingness during the weekend to extend the current output cuts of 9.7 million barrels per day (BPD) by one more month, till the end of July. The gains in crude oil were further bolstered by the report that showed Saudi Arabia made the biggest price increase for crude exports in two decades. Moreover, Iraqi Finance Minister Ali Allawi said that Iraq will comply with the OPEC+ agreement and will commit to it until it expires. However, in the meantime, he wanted OPEC+ to take into consideration the economic and living conditions of countries while assigning quotas for oil production. Iraq, being the second-largest oil-producing country, faced troubles in adhering to its production limits with political and financial problems on board.
Looking forward, traders will keep their eyes on the qualitative catalysts for fresh impulse. The OPEC+ presser at 10:00 AM GMT will be the key for WTI prices. Elsewhere, the growing hopes of a faster economic recovery may keep the buyers strong.
Daily Support and Resistance
Pivot Point 40.07
WTI crude oil prices are likely to find resistance around the 40.19 level. A bullish breakout of 40.19 level can lead to further higher crude oil prices until the next resistance area of 41.79. Conversely, the support holds at 38.80 level. Let’s look for buying trades over 40.20 and bearish below the same today.