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Oil prices are once again registering a 1% profit, facing continued pressure from OPEC+ headlines emerging from the ongoing meeting. Despite Angola and Nigeria’s hesitance to agree on production cuts, the spotlight has now shifted to Iraq. Recent data shows that Iraq has surpassed its quota by more than 200,000 barrels per day. OPEC+ officials are pushing for a collective production cut agreement involving all parties within OPEC+.
In the meantime, the US Dollar (USD) is striving to rectify its standing. As markets may have slightly underestimated the Greenback. While attention is on the conclusion of the US Federal Reserve’s hiking cycle. Markets were surprised by a sudden and substantial downturn in both growth and inflation in the Eurozone. At this pace, the Eurozone might revert to deflation next year, necessitating quicker cuts. This, in turn, would result in a widening rate differential, favoring a stronger US Dollar once again.
As of the current moment, WTI crude oil valued at $78.48 per barrel, and Brent oil positioned at $83.49 per barrel.
Oil Prices: OPEC+ Meeting Highlights and the Quest for Production Cuts
The occurrence of a press conference or a joint statement post-meeting remains uncertain. OPEC+’s history of issuing statements marked by unpredictability, often featuring conflicting messages from individual participants that diverge from the joint statement issued by OPEC+.
Initiating around 10:30 GMT, the OPEC+ meeting saw both Nigeria and Angola initially endorsing a production cut in June, only to backtrack on that commitment now. Recent data reveals that these opposing countries are falling short of meeting their maximum production quotas.
All eyes are on whether Saudi Arabia can successfully implement production cuts across all members, aiming to establish a solid floor in oil prices. Despite unexpected builds or drawdowns in the US stockpile numbers reported by the American Petroleum Institute (API) and the US Energy Information Administration (EIA), oil prices persist in their upward trajectory, with the OPEC+ meeting taking precedence in the current narrative.
Also Read: EUR/USD Declines Due Weaker EU Inflation, Focus on to US PCE
Oil Price Dynamics: OPEC+ Developments and Key Resistance Levels
Oil prices are set for a day filled with developments as ongoing headlines determine whether there will be a consensus or impasse regarding production quotas for all OPEC+ members. Commodity traders face a demanding task in navigating this uncertainty. While forecasting the outcome remains challenging, it is probable that some form of agreement will be reached. The existing subdued demand side may prompt several OPEC+ members to implement production cuts, seeking to establish price stability.
Looking at the positive aspects, $80.00 serves as the resistance to keep a close eye on. If crude manages to surpass this threshold, attention should shift to $84.00 (purple line) as the subsequent level where selling pressure or profit-taking may materialize. Should oil prices consolidate above this point, the upper range around $93.00 could once again become a relevant consideration.
On the downside, traders observe a potential floor forming around $74.00. This level acts as the final defensive line before the prospect of entering the $70.00 range and below. Keep a watchful eye on $67.00, marked by the triple bottom from June, as the next support level to monitor.
