The price of oil is predicted to continue to increase as OPEC+ keeps an eye on further cuts. Rumors suggest that there are still disagreements regarding 2024 quotas within OPEC+. While WTI faces technical hurdles, retail traders are overwhelmingly long on WTI at present.
To learn more about price action, chart patterns, and moving averages, check out the DailyFX Education Section. The OPEC+ meeting will dominate discussions regarding oil prices, and new cuts will likely be announced.
Expectations are that tomorrow’s virtual meeting will be crucial for oil prices and producers as 2024 draws closer. Disputes between countries regarding the supply and output quotas have been in headlines this week. Sources within the past three hours claimed no agreement has been reached, and a further delay in the virtual meeting remains possible.
Two hours after, the Wall Street Journal gave reports citing sources. They claim that OPEC+ is considering new oil production cuts of as much as 1 million barrels a day, with Saudi Arabia openly supporting the idea, while the UAE are reportedly against it.
The disagreements are rather surprising given the global economic outlook, and the conflicts in the Middle East and Russia/Ukraine. The concern is that exports may be disrupted from both Russia and Kazakhstan which could affect upto 2 million barrels per day.
Next week, we also have the US Federal Reserve’s preferred inflation gauge to come, along with a host of Federal Reserve speakers who could add an extra layer of volatility to the US Dollar. From a technical perspective and looking ahead, WTI does appear to have bottomed out, having just printed a new higher low as it looks for a change in structure. WTI remains bearish for now. It needs a daily candle close above the $78.55 mark, needed for a change in structure and for bulls to assume control.
IG client sentiment data tells us that 82% of traders are currently holding long positions. Given the contrarian view to client sentiment, it is suggested we are destined to revisit recent lows. For a more in-depth look at WTI/Oil Price sentiment and how to use it, download the free guide.
