Oil prices remained stable in Asian trading on Monday as markets anticipate the upcoming OPEC+ meeting on June 2. During this meeting, producers are expected to discuss maintaining voluntary output cuts for the remainder of the year. U.S. West Texas Intermediate (WTI) crude futures rose by $0.24 to $77.96 per barrel.

Last week, Brent crude ended approximately 2% lower, while WTI saw a nearly 3% decline after Federal Reserve minutes indicated that some officials might consider further interest rate hikes to control inflation.

OPEC+ Meeting and Output Cuts

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) have postponed their meeting by a day, now set to be held online. Producers will discuss extending the voluntary output cuts of 2.2 million barrels per day (bpd) into the second half of the year.

Sources from OPEC+ suggest that an extension is likely. Combined with an additional 3.66 million bpd of cuts already in place, these measures amount to nearly 6% of global oil demand.

US Economic Data Impact

Sugandha Sachdeva, founder of SS WealthStreet, notes that WTI crude oil prices are expected to maintain current gains due to the anticipated extension of output cuts.

However, the trajectory of WTI prices will also be influenced by the upcoming U.S. Producer Price Index (PPI) data, which will provide insight into the Federal Reserve’s potential rate adjustments. The PPI data is scheduled for release this week and is crucial for shaping future monetary policy decisions.

Market Sentiment and Oil Demand

OPEC projects strong growth in oil demand of 2.25 million bpd this year, while the International Energy Agency (IEA) forecasts a slower growth rate of 1.2 million bpd. ANZ analysts highlight that gasoline usage will be closely monitored as the Northern Hemisphere enters summer, a peak season for driving holidays.

Despite a post-COVID high in U.S. holiday trips, improved fuel efficiency and the rise of electric vehicles (EVs) may keep oil demand subdued, although this could be offset by increasing air travel.

WTI Crude Oil Price Forecast

WTI crude oil is currently trading at $77.96 per barrel. Immediate resistance levels are at $78.50, $79.00, and $80.00. On the downside, support levels are at $77.00, $76.50, and $75.50.

The Relative Strength Index (RSI) stands at 50, indicating neutral momentum, while the 50-day Exponential Moving Average (EMA) is at $77.86, suggesting mild support around this level.

Crude Oil Price Forecast: Technical Outlook

The pivot point, indicated by the green line, is set at $77.56, which serves as a critical level for potential market direction. Immediate resistance levels are noted at $78.29, $79.01, and $79.92.

On the downside, support levels are positioned at $76.87, $76.13, and $75.46.Technical indicators show the Relative Strength Index (RSI) at 58.00, suggesting bullish momentum.

The 50-day Exponential Moving Average (EMA) is at $77.69, indicating a supportive trend.In conclusion, the outlook remains bullish above $77.50.

However, a break below this pivot point could trigger a sharp selling trend. WTI crude oil prices are likely to remain supported ahead of the OPEC+ meeting, with a bullish outlook if production cuts are extended.

However, economic indicators such as the U.S. PPI and the Federal Reserve’s interest rate policy will also play significant roles in determining the market direction.