What looked like a breakout day for oil was met with a bit of setback after some technical selling near $120 before being pressured lower by a report that OPEC+ are planning for an increase in oil output.
The low yesterday hit around $114.15 but was defended by the 100-hour moving average, before price is recovering to $116.70 at the moment.
As much as the report above looks like a headwind for oil, the details are less worrying. Some OPEC+ members are said to be exploring the idea of suspending Russia's participation so that they can produce more. However, even in current circumstances, we're seeing producers struggle with spare capacity and the bloc is not able to keep up with the increase in oil output in recent months.
Unless OPEC+ threatens to really open up the taps big time, the tighter oil market will continue to be a tailwind for prices surely. Sentiment is key but the backwardation in prices don't lie.
Going back to the charts, yesterday's price action suggests the $120 mark will be key for WTI to really push for further gains. For now, the bullish momentum is still being sustained by buyers have to do more to really chase the highs seen during the peak of the Russia-Ukraine conflict.
