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Oil traded a high of $69.14 last Thursday, recovering all its losses from the prior week, although it slid 0.7% on Friday. This week’s OPEC+ meeting should reaffirm the bloc’s plans to gradually ease production curbs with little probability of surprises. In the absence of any strong catalyst, strategists at OCBC BAnk expect crude to face stiff resistance at the psychologically important $70 level.  

Oil recovers all of its prior week’s selloff

“A decline in both US crude oil and gasoline inventories – the latter partially a result of the Colonial Pipeline cyber-hacking – proved to be the catalyst in sending oil prices to a new high since the pandemic began. Accordingly, the crack margins for Asia gasoline have returned to about $6/bbl, while that of diesel remains elevated.”

“OPEC+ meeting on Tuesday should affirm the bloc’s plan to continue easing production curbs and may prove to be a non-event. Any discussion on the potential return of Iranian crude on international waters will be a bonus.”

“In the absence of any strong catalyst, we expect crude to face stiff resistance at the psychologically important $70 level, which suggests the possibility that oil may head lower this week on technical plays.”