WTI Price Analysis: Oil prices fall amid dollar recovery and OPEC cuts

• WTI fell towards $73.25, with losses of 1.50%.
• The US dollar measured by the DXY index rose towards 103.85, weighing down the black gold.
• Doubts about further production cuts by OPEC also put pressure on the price.

Earlier in the week, the barrel of West Texas Intermediate (WTI) posted its third consecutive day of losses, driven by the strength of the US dollar and speculation among traders that the Organization of the Petroleum Exporting Countries (OPEC) will not make more production cuts after his latest decision.

Last week, OPEC+ countries, led by Saudi Arabia, collectively decided to significantly reduce their oil production by about 2.2 million barrels per day (bpd) by early next year. That said, oil price reaction was downward as markets were disappointed by the magnitude of the cuts and skeptical of further reductions in the future.

Furthermore, global uncertainty about global demand for black gold paves the way for WTI to fall, as the main world economies begin to see the effects of their contractionary monetary policies on their economies. Along these lines, in the US, key labor market figures will be published this week, which will end with the Non-Farm Payrolls report on Friday, and its result will probably condition the next decisions of the Federal Reserve (Fed). If the data warrants further tightening, the US economy (the largest consumer of oil) could face additional challenges that could negatively affect oil demand.

WTI levels

According to the daily chart, the outlook has turned bearish for WTI. This is mainly because the Relative Strength Index (RSI) and Moving Average Divergence (MACD) are in negative territory as the price is seen below their 20,100 and 200-day Simple Moving Averages (SMA). This indicates that on the shorter and broader scales, sellers are dominating.

Resistance levels: $75.00, $76.15 (20-day SMA), $77.00.

Support Levels: $72.80, $72.30, $71.00.

WTI Daily Chart