Summary:
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OPEC+ agree to 1.2M output cut
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Deal has provided a big boost with Oil and OIl.WTI both up by around 5%
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Markets probing weekly highs and possible resistance
It’s been a wild week for oil traders with several big swings in the market, but as the dust settles it appears that the price may have found a floor as it looks to recover from after the large recent declines. Rumours that OPEC+ would and then wouldn’t reduce their production have caused the markets to seesaw but it now seems like a deal has been reached which will see a target 1.2m bpd reduction. This is believed to compose of around 800k barrels from OPEC and 400k barrels from non-OPEC members which will likely be delivered by Russia.
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There’s been a large push higher in the price of Oil on this news and the market has once more moved back near recent highs and possible resistance around 63.60. Source: xStation
The fundamental side of the crude market has clearly improved now this deal has been reached, and with a large drawdown in US inventories yesterday it’s been a good week for oil bulls. They may receive a further boost going forward if the USD depreciates further and today’s NFP release could help a little on this front.
If Oil has bottomed for now then fib retracements could offer possible targets for longs or areas where bears may look to enter short. The 23.6% at 64.60 coincides nicely with prior swing level but if price gets above here then the region from the 38.2-41.4% at 68.81-69.73 could be worth keeping an eye on. Source: xStation
