- Crude trades cautiously as traders await further OPEC-Russia statements.
- Major OPEC meeting June 21st-22nd could see production limits increased.
Crude oil is remaining cautious in Thursday’s trading with WTI cycling around the 65.00 per barrel level.
Oil traders are still hesitant as OPEC, joining forces with non-OPEC Russia, plan to raise the collective ceiling on oil production as global supplies have begun to stabilize. With production limits set to go up, traders are having a hard time justifying pulling the trigger, though the OPEC–Russia target of raising production by over a million bpd may not come to fruition, as noted by analysts at ANZ:
Saudi Arabia and Russia are considering raising output by 1mb/d. However, we expect an increase of 600kb/d. Such an increase could be absorbed by the market without altering the fundamentals. We see that depleted inventories and geopolitical risks are keeping prices well supported. OPEC meeting 21-22 June: decision to either raise output or continue with production cut.
– ANZ.
WTI crude levels to watch
WTI peaked at 72.83 in mid- to late May, and revelations that OPEC and Russia would lift production limits has seen spot oil slide over 10% since the multi-year high, but prices have been held aloft by current market constraints, and WTI has failed to close below 64.50 as prices find major support. If production limits don’t lift by as much as expected, then bulls could quickly push through resistance at the last swing high of 67.30, while an unexpected bearish panic could send prices back into April’s lows near 61.80.
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