WTI oil price is declining ahead of the OPEC+ meeting

26 May 2023 220
WTI oil price is declining ahead of the OPEC+ meeting

Fundamentals strengthen the sentiment for selling WTI crude oil.


Global oil prices are declining on Friday, as they did the day before. Markets are assessing OPEC+ policy after Russia’s deputy prime minister’s speech. Alexander Novak expressed the opinion that no actions will be taken at the OPEC+ meeting on June 4. He explained it by the fact that just a month ago some countries decided to cut oil production because of the slow global economic recovery.


Managing director of Vanir Global Markets Pte. James Whistler indicates that there is mostly caution sentiment in the markets, and some easing of the situation is expected. These comments are cited by Bloomberg.


The U.S. dollar has been strengthening against other major currencies for the fifth consecutive session. Its rise makes goods more expensive for holders of other currencies and this reduces demand for them. According to statistics, the U.S. economy is resilient even after an aggressive cycle of hikes by the Federal Reserve, putting additional pressure on the oil price.


Markets continue to closely monitor the U.S. debt ceiling negotiations, as U.S. President Joe Biden and top Republican in Congress Kevin McCarthy appear to be close to reaching a deal.


The total number of Baker Hughes drilling rigs will be published today at 6 PM GMT. Active rigs in the U.S. reflect the current potential of the hydrocarbon production sector. The latest report showed that they amounted to 720. If their number increases, the WTI oil price will decline.


WTI oil price broke out of the ascending correction channel on the H1 timeframe.


According to the wave analysis, the price is in the formation of the second ascending wave on the M30 timeframe.

WTI oil price is declining ahead of the OPEC+ meeting - Photo 1

The Stochastic Oscillator (standard values) indicates a possible completion of the second wave’s formation and transition to the third descending one, as the curve is out of the overbought zone. Breaking through the top of the first wave at 71.00 will strengthen the oil price movement towards selling.


Signal:

The short-term outlook for WTI suggests selling

The target is at the level of 70.00.

Part of the profit should be taken near the level of 71.00.

The Stop-loss is at the level of 72.75.

Bearish trend is of short-term nature, so it is worth selecting the trading volume of not more than 2% of your balance.

 


This content is for informational purposes only and is not intended to be investing advice.

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