WTI Oil Hovers at $65 as OPEC+ Eyes Output Hike and Venezuela Ramps Up
WTI crude oil is up in Asian trading, around $65.25 per barrel on Monday after falling 3% last week. Despite the small gain, sentiment...
Quick overview
- WTI crude oil is trading at approximately $65.25 per barrel, recovering slightly after a 3% drop last week, but market sentiment remains fragile.
- Weak economic signals from the US and China raise concerns about global energy demand, although potential US trade deals with the EU and Japan may provide some support.
- The Biden administration's decision to allow Chevron to resume operations in Venezuela could add over 200,000 bpd of heavy crude to the market, alleviating supply issues.
- Traders are closely monitoring the upcoming OPEC+ meeting, which may announce an output hike that could impact short-term prices.
WTI crude oil is up in Asian trading, around $65.25 per barrel on Monday after falling 3% last week. Despite the small gain, sentiment is still fragile. Investors are weighing weak US and China economic signals against supply side developments that could impact short term price action.
China’s slowing factory activity and US business investment are red flags for global energy demand. But hopes for US trade deals with EU and Japan are helping to cushion the downside. If signed, these deals could boost growth and stabilize oil consumption in key regions.
In Latin America, the Biden administration is reportedly going to allow Chevron and other companies to resume limited operations in Venezuela. Analysts estimate this could add over 200,000 bpd of heavy crude to the market, some relief for refiners struggling with tight supply in that category.
OPEC+ Meeting Could Change Supply Outlook
Oil traders are now watching OPEC+ which is expected to announce an output hike on Monday. The producer group is looking to regain market share as summer travel demand peaks in the Northern Hemisphere. More supply could cap prices unless consumption picks up.
Meanwhile, the US oil and gas industry is showing signs of softening. Rig count declined for the 12th time in the past 13 weeks, a clear sign that domestic producers are getting cautious with volatile price action and tightening financial conditions.
Here’s what to watch:
- OPEC+ Output Decision: A confirmed hike could cap prices short term.
- Venezuela Production: Over 200K bpd of exports could ease heavy crude shortages.
- US Rig Count Drop: Declines mean less supply in coming months.
Crude Oil Technical Outlook: Triangle Holds but Pressure Builds
From a technical standpoint, WTI (XTI/USD) is consolidating near support at $64.74, the base of a rising triangle. Price has bounced to $65.24 but is below the 50 period SMA at $66.29 and a descending trendline – two indicators that are bearish.
If sellers can push price below $64.74, targets are $63.97 and $63.01. Bulls need a break above $66.29 to change momentum. Next resistance zones are $66.98 and $67.62.RSI is 42.78 – not oversold but still weak. No breakout, so traders will wait for macro data or OPEC+ news.
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