- WTI remains close to Thursday’s high of $117.50 despite inflows of risk aversion from Wall Street following strong US jobs data.
- OPEC+’s announcement of a faster pace of production quota increases in July and August has not turned the bulls off.
WTI futures one month remained close to Thursday’s highs, despite US stock markets trading lower on fears of Fed tightening following strong US labor market data. WTI fell as low as $111 a barrel on Friday, after OPEC+ confirmed it will increase production quotas by 648,000 barrels a day each month in July and August to meet what they say is rising demand.
However, WTI bounced over $6 during the day to $117.50, where it is still trading on Friday, as traders digest the details of the latest OPEC+ move. Quota increases were spread evenly among producers, including Russia, rather than being allocated to nations that can actually increase production (such as Saudi Arabia, the United Arab Emirates and Iraq), leading analysts to the conclusion that OPEC+ will not be able to meet the promised production increases in the coming months.
In recent months, Russian production has suffered a sharp decline due to Western sanctions following its invasion of Ukraine in recent months, exacerbating a pre-existing OPEC+ production problem in which smaller producers (particularly in Africa) were struggling to keep pace with production quota increases. In short, the latest OPEC+ announcement hasn’t deterred crude bulls, who have also been pushing prices up lately on expectations of increased demand in North America and Europe as the continents enter their peak driving season. summer, and in China, where lockdowns are being eased as Covid-19 infections decline.
WTI bulls will likely next target a retest of previous weekly highs in the $120 area. Breaking above this level next week would open the door to a rally towards multi-year highs in mid-March around $130 a barrel.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
