Oil prices fell this week over concerns about more OPEC+ production and worrying Covid-19 figures in the U.S., although crude bounced back in early trading on Tuesday. Oil prices remain stuck at around the $40 and $43 price levels for WTI and Brent, respectively, waiting for a clear direction.
WTI Crude Oil has traded in a tight range around $40 a barrel this month as low supply and recovering demand is off-set by nervousness over a pandemic that’s still not under control in many parts of the world. A worsening relation between Washington and Beijing is also clouding the current global economic outlook, with the U.S. recently announcing an end to Hong Kong’s special status.
An OPEC+ technical committee that met online on Tuesday announced plans for countries including Iraq, Nigeria and Kazakhstan to make an additional 842,000 barrels a day of production cuts over the next couple of months, the delegates said. The alliance is expected to announce that its overall reduction of 9.6 million barrels a day (about 10% of global supplies) will be eased from August.
Our Technical view on Oil at the moment is Bearish as we are favoring a reduction in its price to below $30 per Barrel in the near term. Although the (red) trend line is holding the price on the upward moving trajectory at the moment, we do foresee a break below this trend soon, which will give us a Sell signal that can take us towards the price level of $28 per Barrel.
The Key resistance level currently to the upside is at $41.68, which if broken to the upside, would confirm a continuation in the upward trend.
WTI Crude Oil - H4 Bearish