- Oil: bulls losing grip above the 100-D SMA, technicals extend bearish.
- WTI traders await key reports next week, eyes on DXY.
WTI is currently trading at $64.96c bbls, having made a high of $66.02c bbls and a low of $64.60c bbls. The black gold is on the backfoot, extending the end of May’s downside, weighed by a lack of clarity with respect to when output will be increased by OPEC and its allies.
Analysts at Commerzbank argued that
“the prospect of OPEC and Russia expanding their oil production in the second half of the year is prompting speculative financial investors to withdraw further.”
While traders would like more clarity out of OPEC in respect to raising its crude production, bears have enjoyed a decline of around 5% in the month of May on news that Saudi Arabia and Russia were planning to pump more crude due to the increased geopolitical risks to supply in Iran and Venezuela; (This follows a year of holding back output where OPEC and 10 producers outside the cartel, including Russia, had been cutting crude output by roughly 1.8 million bbls per day since the start of 2017).
Traders keep an eye on DXY and key reports next week
The decline follows the peaks of last months $72.84c bbls top that was scored on the back of Trump’s decision to exit from the ‘Iran deal’, a 2015 international agreement to curb Iran’s nuclear program; Traders expected the move to hinder the region’s oil exports. Meanwhile, traders will need to wait until next week for the release of some key monthly oil reports. The EIA’s short-term energy outlook and OPEC oil reports are scheduled for June 12th, while the International Energy Agency’s oil report arrived on June 13. Eyes will, for the time being, stay o the DXY that has been travelling in northerly trajectory today between 93.6640-94.1950 so far.
WTI levels
Technicals lean bearish with the price below the 100-D SMA and RSI headed towards a test of 30, into oversold territory. $67.49 (55-D SMA) seconded by $68.20 (10-D SMA) and then $68.55 (high May 30). On the flipside, a break of $65.23 (low Jun.4) opens $61.77 (low Apr.6) ahead of $60.03 (monthly low Mar.8).
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