Oil erases most of the decline

WTI technical analysis

All is quiet on the OPEC front but it's only a temporary truce as we march closer to August. Word is that the UAE isn't taking larger orders for August in a sign that this dispute is more of a philosophical one for now.

I wonder though if other countries that were planning on a 400k bpd collective increase aren't tempted to fill their would-be quotas. Those are the kinds of cracks that can break the dam.

The other question is whether everyone at OPEC overplayed their hand to begin with. The drawdowns in US inventories lately and rapid progress on vaccination suggest that OPEC might not need to preserve much spare capacity beyond April.

Technically, the chart above nicely shows the outlines of support and resistance with $73-75 as the bottom/top edges of the range.