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  • Crude oil prices lose traction following rally witnessed in Asian session.
  • OPEC+ agreed to extend oil output cuts by one month.
  • Saudi energy minister says additional voluntary oil cuts were for one month only.

Crude oil prices started the new week on a strong footing after the OPEC and its allies (OPEC+) agreed to extend the oil output cuts of the current 9.7 million barrels per day (bpd) by one more month until the end of July. Additionally, Friday’s upbeat Nonfarm Payrolls report from the US eased worries over a dismal energy demand outlook and provided an additional boost.  

The barrel of West Texas Intermediate (WTI) advanced to its highest level in three months at $40.42 in the early trading hours of the Asian session but failed to preserve its bullish momentum.

Focus shifts to weekly oil inventory data

During a news conference on Monday, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said that the additional voluntary oil output cuts for one month only. “Deeper voluntary cuts by gulf OPEC have served their purpose,” bin Salman added and caused crude oil to turn south. As of writing, the barrel of West Texas Intermediate was down 0.65% on the day at $38.85.

Meanwhile, Russian energy minister Alexander Novak said that they will be paying close attention to how quickly demand recovers when assessing a possible extension to the OPEC+ deal. 

Later in the week, the American Petroleum Institute’s and the US Energy Information administrations weekly crude oil stock reports will be looked upon for fresh impetus.

Technical levels to watch for

 

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