Today is the OPEC+ meeting, which should end later this evening. The consensus among the participating countries is to increase the oil output by 400k barrels per day (bpd). But, with the current energy troubles and increasing prices, the US has urged OPEC to hike oil production by 600k-800k.

But despite calls by the US to loosen the taps, OPEC+ is almost certainly not going to budge with the plan to raise output by 400k bpd. The bloc has maintained a consistent message in outlining that pandemic risks are not over yet, and they are also arguably not going to overreact to the global energy crisis – at least for the time being.

US WTI Oil Live Chart – The Flush Below $80 is Over

Oil reversing just above the 200 SMA 

Oil was down 0.5% on the day, to $79.70, after the drop yesterday, with the support around the $80 mark broken for now. This comes after a period of back and forth consolidation after testing the recent highs close to $85. I’d still argue that the fundamentals are siding with a push higher over the medium-term but as mentioned earlier in the week, a flush lower is arguably healthy in building a better foundation for a more robust rally in the weeks/months to come.

The flush might be over now, after the $5 retreat this week and the drop below $80, flushing out some weak stops below that big round level. We had also placed our stop there, while now the price has reversed and US WTI Crude Oil is trading above $83.

US WTI Crude Oil Live Chart