WTI Crude Oil at $77.12 as OPEC+ Extends Cuts and Gaza Ceasefire Eyed

Oil prices increased in Asian trading on Monday after OPEC+ extended its production cuts into 2025. However, speculation over a Gaza ceasefire limited these gains.

Concerns over sluggish demand were further exacerbated by weaker-than-expected PMI data from China, the world’s largest oil importer. Additionally, fears of prolonged high interest rates contributed to crude oil nursing losses from the previous week.

OPEC+ Extends Production Cuts

OPEC+ decided to maintain its current production cuts, keeping 5.8 million barrels per day offline until early 2025.

This includes 3.6 million bpd cuts until the end of 2024 and an additional 2.2 million bpd phased out between October 2024 and September 2025. This move, anticipated by the markets, aims to support oil prices through tighter supply.

Israel-Hamas Ceasefire in Focus

Last week, President Biden unveiled a three-phase plan for a ceasefire between Israel and Hamas. The proposal includes a six-week ceasefire, Israeli withdrawal from Gaza, and an exchange of hostages. Reports indicate tentative approval from both parties.

A ceasefire could reduce the geopolitical risk premium in crude prices, which has been a significant driver of recent price movements.

WTI Crude Oil Technical Outlook

Currently, WTI crude oil (USOIL) is priced at $77.12, down 0.89%. Key price levels include a pivot point at $77.49. Immediate resistance is at $78.58, with further resistance at $79.36 and $80.53.

On the support side, the immediate level is $76.16, with additional support at $75.11 and $74.31.

Technical indicators show the 50-day EMA at $78.43 and the 200-day EMA at $79.58. USOIL maintains a bearish outlook below the pivot point of $77.49. A break above this level could signal a bullish trend, while a continued decline would reinforce the bearish sentiment.

Conclusion

The crude oil price forecast for WTI remains cautious amid OPEC+ production cuts and geopolitical developments. The market is closely watching for any signs of increased demand or further regulatory changes that could impact prices.

Investors should monitor key resistance and support levels to navigate potential volatility.