On Sunday, the OPEC+ delivered some more bullish news for the oil market as it looks like they want to keep prices above $70 level. In fact, Saudi Arabia announced that it will make additional voluntary production cut of 1 million bpd starting in July for one month, although it can be extended based on the market outlook. All the other members will extend their production cuts through 2024.
The OPEC+ supply cuts are undoubtedly bullish in the short-term but we have already seen that in a contractionary business cycle the demand side weighs a lot on the oil market as the latest surprising cut was completely faded and oil prices tumbled to $64 from the $83 high.
WTI Crude Oil Technical Analysis – Daily Timeframe
On the daily chart, we can see that WTI Crude Oil opened with a positive gap at $75 and filled it soon after during the APAC trading session. Oil has faced lots of selling pressure around this $72-$74 resistance zone and we will see in the next days if the OPEC+ decision is enough to boost Oil prices or if we get another selloff like the last time. The target on the upside would be the $83 high, while the target on the downside would be the $64 low.
WTI Crude Oil Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that WTI Crude Oil has pulled back to the nearest support level at $72. Here the buyers may lean on the blue 8 moving average to then push to the upside and extend the rally past the $75 high. The sellers, on the other hand, are likely to pile in here defending this resistance zone and targeting the $64 low.
WTI Crude Oil Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price has filled the gap and pulled back to its original Friday’s closing price. Here we can find the red 21 moving average and the 38.2% Fibonacci retracement level. We should find buyers leaning on this support zone targeting new highs. Conversely, the sellers will look to extend the fall in case the price breaks below the 38.2% Fibonacci level and possibly invalidate the entire bullish setup if the price falls below the $71 level.