- WTI rallies nearly 4% on Thursday after the OPEC+ meeting.
- OPEC+ agreed to a gradual oil output increase in May and June.
- OPEC+ dour outlook on the global oil demand limits the gains.
WTI (futures on NYMEX) experienced a volatile week before the oil output policy decision from OPEC and its allies (OPEC+) revived the optimism.
The OPEC+ reached an agreement to gradually ease the production cuts, by increasing output by 350,000 barrels per day (bpd) in May, 350,000 bpd in June and 400,000 bpd in July.
The black gold rallied as much as 4% on Thursday, in a positive response to the OPEC+ outcome. The sell-off in the US dollar, driven by the tumbling Treasury yields, also collaborated with the upbeat momentum in the dollar-denominated oil.
However, the US oil settled the week at $61.30, higher by only 1%, as the new wave of the coronavirus and fresh lockdowns worldwide cast a dark cloud on the global economic recovery.
Further, the OPEC+ downward revision to the global oil demand forecast for this year by 300,000 bpd also limited the upside in the WTI barrel. Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said the market’s recovery was “far from complete.”
Meanwhile, the number of active oil rigs in the US rose to 337 from 324 last week, which could have contributed to the pullback in the commodity.
WTI technical levels to watch
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