Oil launched the new week's trading higher, supported by an announcement from OPEC+ made over the week. Group of oil producers announced on Sunday that it has decided to extend voluntary output cuts of 2.2 million barrel per day beyond Q1 2024 and through the second quarter of the year. Key members of the group - Saudi Arabia, Russia, Iraq and United Arab Emirates - all agreed to extend voluntary cuts until the end of June. Unanimous support for the extension highlights unity within the group, which was put under question after Angola left OPEC in November 2023. However, the impact of the announcement turned out to be short-lived as all the earlier gains have been erased, with WTI and Brent now trading lower on the day. Such a development highlights that markets are still concerned about the global economic outlook and demand for oil.
Taking a look at WTI chart (OIL.WTI) at D1 interval, we can see that climbed to the $80 per barrel resistance zone at the end of the previous week. An attempt to deliver a clear break above this zone was made today, but bulls failed and now price is pulling back from the $80 area. A near-term technical support to watch is the 200-session moving average (purple line), which currently runs in the $78 area. Should sellers managed to push the price below it, attention may shift towards the $76 swing area as the next potential support.
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Source: xStation5
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