Crude Oil – Volatile Pace at OPEC + Meeting today

Crude oil retreated by more than two percent yesterday. Prices were depressed as weaker-than-expected global economic news negatively impacted energy demand and oil prices.

In addition, the weekly EIA report showed that crude oil stocks rose unexpectedly and gasoline stocks rose to a three-year high. A weaker dollar and continued geopolitical risks in the Middle East supported crude on Wednesday.

However, prices gained a boost today as concerns over Middle East supplies continued amid rising hostilities in the Red Sea, while expectations of an OPEC+ meeting also kept traders cautious.

Markets also digested the possibility of an extended cut in US interest rates after the Federal Reserve cut rates in March.

The US has targeted several unmanned drones in western Yemen as they prepare for launch, media reports say, just a day after a deadly drone attack on a US base in Jordan.

The strike signaled little easing in the Middle East conflict, which has disrupted shipping lanes through the Red Sea and fueled fears of oil supply delays in Europe and Asia. Concerns about supply disruptions were the main support for oil prices in January, helping them after three straight months of losses.

A strong dollar held back a significant rise in oil prices after the Fed said it was in no rush to cut interest rates.

Although the president of the Federal Reserve Jerome Powell pointed to the continued resilience of the US economy, the possibility of higher interest rates still does not bode well for demand among the world’s largest fuel consumer.

The dollar recovered after Powell’s comments and affected oil prices.

Further, The Organization of the Petroleum Exporting Countries and Allies (OPEC+) will also hold a joint ministerial oversight committee meeting later that day, the bloc’s first major meeting in 2024.

However, according to Reuters, the meeting is unlikely to result in any production. changes

Overwhelming production cuts by OPEC+ at the end of 2023 have been the main point of contention for oil prices, as the move has led to a less tight market in 2024 than expected.

The cartel also now appears to have limited operational resources to cut production and support oil prices

Technical Outlook

The price of crude oil was 2.55% yesterday. Prices have retreated from a high of 6529, a high of 29/01/2024 and yesterday’s low yesterday of 6290.

On the above chart, prices are trading at the key support level of 6260. A break below this will create pressure towards 6260. the next support at 6175-6110. However, if it does not break, there is a chance for a short-term recovery in the direction of 6450-6550.

RSI 14 and its 9 SMA does not give a clear signal.

In addition, OPEC+ meeting headlines are important crude triggers. Any decision to change should not lead to pressure or vice versa.

Also Read : Eurozone GDP, US consumer confidence key drivers today , China PMI, US monetary meeting will be main triggers today

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