WTI prices dip ahead of OPEC+ delayed meeting
- WTI prints minimal losses of less than 0.20%, though set to finish below $75.00.
- Disagreements among OPEC+ countries were one of the reasons behind last week's Oil’s 3% plus drop.
- Saudi Arabia and Russia are preparing to extend their 1.3 million Crude Oil production cut into Q1 2024.
The US Crude Oil benchmark, also known as Western Texas Intermediate (WTI), dropped 0.20% on Monday due to a delay of the Organization of Petroleum Exporting Countries and its allies (OPEC+) reunion, as members disagreed on production targets. Hence, WTI is trading at $74.99, late in the New York session.
WTI struggles to reclaim $75.00 amid disagreements between OPEC+ members
Some of the clashes lie in setting African producers' quotas, alongside some OPEC+ members suggesting crude oil production cuts are needed to keep the market in balance and underpin Oil prices.
Analysts at ING said they expect Saudi Arabia to extend its 1 million crude Oil production into the next year, and Russia to follow suit, with their 300,000 barrels per day cut. Goldman Sachs analysts noted, “We still expect an extension for the unilateral Saudi and Russian cuts through at least the first quarter of 2024.”
Meanwhile, the United Arab Emirates is poised to ramp up production, while Iraq will resume its northern crude exports via Turkey.
The International Energy Agency (IEA) announced it expects a slight surplus in Crude Oil production in 2024, even if OPEC+ nations extend their cuts into next year. Another headwind for OPEC+ countries is that US crude production continues to increase, exerting downward pressure on Oil prices while easing tensions in the Middle East cooled energy prices.
WTI Price Analysis: Technical Outlook
WTI is set to consolidate at around the $75.00-$80.00 range, after failing to decisively break the November 22 swing low of $73.85, which could have exacerbated a drop to $70.00 per barrel. That said, WTI’s success in registering a daily close above $75.00 could open the door to test the first resistance at the 20-day moving average (DMA) at $77.62 before buyers could lift prices to the 200-DMA $78.06. Further upside is expected once the latter is breached.
WTI Technical Levels