Crude oil continued its rally for the second consecutive week. It gained more than 8%, the biggest weekly gain since 6 February 2023. Oil price sparked sharply supported by lower U.S. crude stockpiles and a halt to exports from Iraq’s Kurdistan region.
Oil prices rebounded from the weekly low after producers shut in or reduced output at several oilfields in the semi-autonomous Kurdistan region of northern Iraq following a halt to the northern export pipeline.
With prices recovering from recent lows, the Organization of the Petroleum Exporting Countries and allies led by Russia are likely to stick to their existing output deal at a meeting on Monday, sources said
Brent crude futures rose by 7.03%, to $79.73 a barrel. West Texas Intermediate crude rose 9.32%, to $75.65. MCX crude oil jumped by 8% and settled at 6199.
Looking ahead, Crude prices will react on OPEC+ meeting. Prices may found further support from a meeting of producer group OPEC+ — which has been orchestrating market support in recent months with words more than the production cuts it promised.
OPEC+ — an alliance of the 13-member Saudi-led Organization of Petroleum Exporting Countries and 10 independent oil producers steered by Russia — is supposed to be practicing a daily output cut of two million barrels. But overproduction by the group is reported commonly, with the refrain being that the market is still balanced.
Technical View
Crude oil had a bullish trade last week. It gained more than 8%. It was the biggest weekly gain since 6 February 2023. Prices recovered sharply from the low 5710 and jumped to the weekly high 6218, before closing at 6199.
Weekly price action resulted in formation of Morning star candlestick which is a bullish pattern.
Further, RSI 14 and its 9 SMA are giving bullish crossover. The momentum indicator MACD is also converting into the positive territory.
All above technical aspects are creating a probability for bullishness in the near future.
Fresh buy will expect above 6225. Projected target would be 6310-6420 with a stop loss of 6125.00.
Alternatively, on the downside crucial support is seen at 5920 and a break below only. Correction is expected to take place and crude oil may retreat towards 5820-5725.