Crude prices climbed by more than 2% on Friday on renewed supply concerns after OPEC+ producers rebuffed a US call to accelerate output increases even as demand nears pre-pandemic levels. On Monday, the bulls remain in control and West Texas Intermediate (WTI) crude oil has added 0.2% so far. WTI has moved from a low of $81.07 to a high of $81.75 as traders continue to price the OPEC+ Group rebuff of the US call to boost supplies beyond its schedule of 0.4-million-barrels per day monthly increases. The cartel's decision came as it expects demand in the fourth quarter of this year and the first quarter of next year will be weak. ''OPEC's message to consumer nations was resoundingly clear—not only has the group of producers eased fears of a faster pace of output hikes, but it has clarified that member nations won't compensate for those who are underproducing relative to their quotas,'' analysts at TD Securities explained. ''This suggests that the very cautious pace of output hikes should keep energy markets on a tightening trajectory in the near term. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Technicians will argue that technical selling also played a key part in driving prices lower on Thursday; WTI prices had been supported by a bullish trendline going all the way back to August, a trendline that up until Wednesday was respected very well. After breaking below this trendline on Wednesday, Thursday saw the first major retest (when prices went above $83.50), which speculative, short-term sellers of crude oil may have leapt on. If oil is trading technically right now, the next key area of support to look at is the 6 July high at around $77.00 per barrel. Whilst some short-term sellers might want to book profit at this level, there is also a risk of the presence of stops below it, so a break below could see the sell-off accelerate and WTI head towards its 50DMA at just above $76.00.

West Texas Oil

Nov 08 2021