Opec+ Production Cuts And Gaza Ceasefire Speculation Push Oil Prices Up

by Yuki

Asian Markets React to OPEC+ Decision

Oil prices experienced a modest increase in Asian trading on Monday following the decision by OPEC+ to extend its production cuts through 2025. However, these gains were tempered by speculation regarding a potential ceasefire in Gaza.

Demand Concerns and Economic Data

Concerns over weak demand were exacerbated by disappointing PMI data from China, the world’s largest oil importer. Additionally, apprehensions about prolonged high interest rates contributed to crude oil sustaining losses from the previous week.

OPEC+ Extends Production Cuts

OPEC+ announced that it will maintain its current production cuts, keeping 5.8 million barrels per day offline until early 2025. This strategy includes 3.6 million barrels per day cut until the end of 2024 and an additional 2.2 million barrels phased out between October 2024 and September 2025. This move, anticipated by the markets, aims to support oil prices by tightening supply.

Focus on Israel-Hamas Ceasefire

Last week, President Biden revealed a three-phase plan for a ceasefire between Israel and Hamas. The proposal involves a six-week ceasefire, the withdrawal of Israeli forces from Gaza, and a hostage exchange. Reports suggest tentative approval from both parties. A ceasefire could reduce the geopolitical risk premium in crude prices, which has significantly influenced recent price movements.

WTI Crude Oil Technical Analysis

WTI crude oil (USOIL) is currently priced at $77.12, down 0.89%. Key price levels include a pivot point at $77.49, with immediate resistance at $78.58, further resistance at $79.36, and major resistance at $80.53. On the support side, the immediate level is $76.16, with additional support at $75.11 and $74.31.

Technical indicators show the 50-day EMA at $78.43 and the 200-day EMA at $79.58. USOIL maintains a bearish outlook below the pivot point of $77.49. A break above this level could indicate a bullish trend, while a continued decline would reinforce bearish sentiment.

Market Outlook

The crude oil price forecast for WTI remains cautious amid OPEC+ production cuts and evolving geopolitical developments. The market is closely monitoring signs of increased demand or regulatory changes that could impact prices.

Investors are advised to keep an eye on key resistance and support levels to navigate potential volatility.

Related topics:

WTI Crude Oil Softens Despite Opec+ Extending Production Cuts

Oil Prices Rise As Opec+ Keeps Cuts, But Demand Is Still A Worry

Opec+ Announces Extension Of Supply Cuts, Gradual Return To Market

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