WTI crude oil are trading in tight range below 30 as traders are unimpressed by the OPEC+ deal on production cut. On Sunday, the OPEC+ group, agreed to cut output by 9.7 million barrels per day in both May and June.
That’s around 10% of global supply before coronavirus pandemic. Together with other producers including the US, total estimated cut could add up to 19.5 million barrels per day. But there are doubts that the eventual effect production cut is much smaller, while compliance remains an issue.
Suggested reading: OPEC+ Deal on Output Cut Unlikely Helps Reduce Surplus. Downside Risk on Oil Price Remains
WTI weakens after hitting 32.15 last week and stays in range. Some support is seen from 4 hour 55 EMA for the moment. And recovery from 20.40 could still extend to 55 day EMA (now at 36.89). But we’re seeing the price actions from there as corrective. Thus, upside should be limited by 38.2% retracement of 65.38 to 20.40 at 37.58. Break of the 4 hour 55 EMA will target a test on 20.40 low.
