Oil Falls Below $61 as OPEC+ Pauses Hikes, Traders Eye $61.50 Breakout
WTI crude oil futures are trading below $61 per barrel on Monday, bringing an end to a 4-day winning streak, as investors grappled...
Quick overview
- WTI crude oil futures have fallen below $61 per barrel, ending a four-day winning streak due to OPEC+'s decision to pause production increases until March.
- Geopolitical risks, including a recent drone strike in Ukraine and tighter US sanctions on Russian oil companies, are contributing to supply concerns despite a forecasted market surplus for next year.
- Technical analysis shows WTI is trading in a range, with key support at $59.25 and resistance near $61.50, indicating potential volatility ahead.
- Traders are awaiting key US inflation data and inventory reports to provide direction for the market as it approaches a critical juncture.
WTI crude oil futures are trading below $61 per barrel on Monday, bringing an end to a 4-day winning streak, as investors grappled with news that OPEC+ had decided to pause its production increase plans from January until March. This move comes hot on the heels of a modest boost in December output, but the group is clearly gearing up for a potential seasonal dip in demand & a looming supply surplus in early 2025.
Still, the ongoing geopolitical risks have prevented investors from selling off in a major way. A recent drone strike by Ukraine on the Black Sea hit a major Rosneft refinery – and that has fuelled worries about supply disruption. Whereas tighter US sanctions on Russia’s major oil players, such as Rosneft and Lukoil, could curb global output just as inventories start to rebuild.
Supply Risks Offset Surplus Concerns
Now, we know there’s a market surplus forecast for next year, but that still doesn’t account for the supply-side disruptions muddying the outlook.
- The US sanctions on Russia could reduce Moscow’s export capacity.
- Conflict-related disruptions in Eastern Europe continue to threaten supply.
- And OPEC+ is cautious about its stance on production, a sign they’re worried about keeping prices stable as we head into 2025.
It’s these kinds of factors that have kept volatility pretty high, and traders are now waiting for some direction from key US inflation data and inventory reports later this week.
WTI Crude Oil Technical Analysis
WTI is currently trading at $60.26 – hovering just above the 38.2% Fibonacci retracement line at $60.05. The prices are stuck in a trade range —a sort of descending triangle — because the bulls are defending $59.25 as support, while the bears are capping gains near $61.50.
The momentum indicators are looking neutral right now—the RSI is around 52, which is a pretty balanced reading—and there’s a pattern of higher lows that suggests we are starting to see early signs of accumulation. The 20-EMA is flat against the 50-EMA, which is hinting at a possible bullish crossover.
A decisive break above $61.50 would likely trigger an upside move that would target $62.58 & $63.85 – whereas a drop below $59.25 would leave us exposed to $58.50 and $57.40. Traders are pretty cautious right now and would rather wait for some confirmation before committing to new positions.
Market Outlook
WTI crude is at a crossroads right now—stuck between OPEC+’s restraint and geopolitical uncertainty. It’s really now or never for the market—a breakout in either direction is likely to set the tone for the rest of November, with $61.50 as the big technical and psychological pivot everyone is watching.
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