Jump to content

Market update: WTI oil slips as OPEC+ voluntary cuts fall short of convincing market sentiment


Recommended Posts

Oil stalled at the 200-day MA; OPEC+ announced a 2M bpd cut for Q1 2024, falling short of expectations. Will bulls recover or $70 retest looms?


original-size.webpSource: Bloomberg


IG Analyst | Publication date: 

Oil prices surged today, nearing the critical $80 per barrel mark. Unexpectedly, the OPEC+ meeting triggered a sell-off instead.

OPEC+ voluntary cuts and Brazil to join

The OPEC+ meeting today presented a multitude of challenges, according to sources. Differing views prevailed as markets eagerly awaited a potential announcement on cuts.

The announcement arrived, confirming an agreement for voluntary cuts of approximately two million barrels per day in Q1 of the next year. Saudi Arabia extended its voluntary output cuts, with the virtual meeting failing to find an immediate solution. Eventually, members concurred on voluntary cuts, with Saudi, Kuwait, Russia, Algeria, and Kazakhstan expressing a commitment to gradually unwind these cuts post-Q1 2024.

Some of the cuts announced by OPEC+ members were 42k barrels/day from Oman, Iraq 220k barrels/day, UAE 163k barrels/day and then of course the extended cuts by Saudi Arabia and Russia leaving the total around 2.19 million barrels per day.

The last surprise that came out of the OPEC+ meeting was the invite to Brazil to join the group with the Brazilian energy minister saying he hoped to join by January.

Another concern for oil producer and the US came from EIA data today which showed that crude and petroleum products supply fell in September to 20.09 million barrels per day, which is the lowest since April. This could further fuel concerns of a global slowdown as we head into 2024.

Looking ahead

US data lies ahead and could have an impact on oil prices. Part of the decline today could be attributed to a stronger US dollar and rising yields, which had an impact on risk appetite.

Tomorrow, we have manufacturing PMI data as well as speeches by Fed policymakers, which get more interesting by the day. Today’s comments struck a more hawkish tone than we have heard over the past couple of days, and could also in part explain the rise in the US dollar.

Upcoming market events


original-size.webpSource: DailyFX

Technical analysis

From a technical standpoint, WTI struggled to close above the 200-day MA today, despite spending considerable time trading above it. As noted earlier, WTI maintained a bearish structure, requiring a daily candle close above the $78.06 swing high for a structural shift and to empower the bulls.

As things stand, there is a real chance that oil could remain rangebound between the recent lows around the $73 mark, and the $78 a barrel handle. We are seeing a death cross pattern complete today as well with the 50-day MA crossing below the 100-day MA, which could embolden bears heading into the weekend.

Key levels to keep an eye on:

Support levels:

  • 75.00
  • 73.00
  • 70.00

Resistance levels:

  • 76.95
  • 78.06
  • 80 (psychological level)

WTI crude oil daily chart


original-size.webpSource: TradingView




This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Crypto trading is a bit complicated when it comes to understanding the dynamics in profit making. Some people are more inclined to technical analysis which of course has been the widely used trading tool but some are more inclined to fundamentals but sticking to fundamentals alone could be highly risky in my own opinion even though crypto is also financial instrument that often respond to news updates.  A blend of the two could provide a safety net for traders in minimizing losses compared to potential profit. The above case scenario is largely attributed to perp futures trading and other derivatives. TA and FA could also be very useful for spot trading but I feel timely listing of projects could largely determine one's profit from investing in a project. These may not be for all projects cos some are **** coins. This could be a personal perspective but I have noticed listing speed is also another important factor to consider along with project fundamentals when trading and if we are to include listing speed as a factor for choosing trade then it will affect our choice of trading platform cos some are more inclined to top cap projects while others are more inclined low cap gems.   My experience with ORDI has proven this trading skill rewarding. ORDI was first listed on Bitget before other exchange joined the listing party after it saw rapid adoption reflecting in it significant MCap growth. This chart should give us a glimpse of my experience with this strategy.
    • In a stunning display of market momentum, the PANDORA token, the first of its kind, has skyrocketed an astonishing 4872% from its introduction on February 2nd to February 7th. This remarkable performance has not only caught the attention of cryptocurrency enthusiasts but has also solidified PANDORA’s position as a groundbreaking asset in the digital currency landscape. Pandora's ERC-404 protocol revolutionizes the token landscape by seamlessly blending the qualities of ERC20 and ERC721 standards. This experimental mixed implementation enables persistent liquidity and non-fungibility for NFTs, unlocking a realm of possibilities previously unexplored. Adding to the excitement, Bitget Wallet is gearing up to introduce a specialized section dedicated to ERC-404 token market listings. This feature creates a hub for tokens that blend the best of both worlds—the liquidity of ERC-20s and the uniqueness of ERC-721 NFTs. I have come to believe that, the electrifying surge of PANDORA token and the innovative ERC-404 standard is not just a fleeting trend but a window into the future of cryptocurrency.
    • A significant turning point in the #PORTALxBitget collaboration is the listing of $PORTAL on Bitget through the Candybomb event, which opens up benefits and synergistic prospects like 1. Diversified Trading choices: Users now have access to a wide range of trading choices thanks to $PORTAL's listing on the exchange, including cutting-edge leveraged trading capabilities and spot trading. This gives customers the freedom to interact with $PORTAL in a way that suits their preferred level of risk and trading techniques. 2. Community Synergy: By uniting the exchange users and the pre-existing $PORTAL community, the Candybomb event stimulates community engagement. Through this synergy, a positive environment surrounding #PORTALxBitget may be developed, encouraging cooperation, information exchange, and sustained interest in the project. Could this recent collab stimulate the  stage for a fruitful and mutually beneficial relationship between #PORTAL and exchange.
  • Create New...