The weekend OPEC+ meeting had minimal impact on crude oil prices. WTI oil opened today at $76.72 per barrel, compared to Friday’s close of $76.57, indicating a mixed response to the producers’ decisions.
On the bullish side, continued restrictions on oil production aim to support prices. Reuters reported that OPEC+ members agreed on Sunday to extend production cuts of 3.66 million barrels per day until the end of 2025.
Conversely, the bearish perspective notes that eight OPEC+ nations have announced plans to gradually reverse voluntary cuts of 2.2 million barrels per day from October 2024 to September 2025.
Goldman Sachs analysts viewed the meeting’s outcome as bearish for the market. “The gradual reduction announcement highlights a strong desire among several members to restore production, given the ample spare capacity,” they stated.
The WTI crude oil chart reveals a break from the upward trend (indicated in blue) mentioned in our 10 May review.
Since then, bulls have attempted to revive the upward trend, but this led to a false breakout of the $80 per barrel psychological level on 29 May (marked by an arrow).
Subsequently, bears took control, driving the price below the blue upward channel’s lower boundary and making the downward channel (shown in red), which started in April, more relevant.
Technical analysis of the oil chart shows:
→ The price is near the red channel’s median line, indicating temporary supply and demand equilibrium.
→ An important support level of $75.75 lies below the current WTI crude oil price, which has held since late winter.
If bulls attempt a rebound (requiring fundamental drivers), they may face resistance at the upper boundary of the downward channel.
If the geopolitical situation in the Middle East remains stable, bears might continue to push towards breaking the $75.75 level – a move that could slow inflation and benefit the current U.S. administration as presidential elections approach.
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