WTI oil rose over $2 on Friday and returned above $61 per barrel, lifted by the decision of OPEC+ group to extend production cuts, implemented after oil prices collapsed during the pandemic in 2020, for another month.
The world’s top oil producers agreed to extend the agreement but decided to start gradual easing of production cuts from May by 350,000 bpd in May and June and to further increase production from July. In addition, Saudi Arabia said it was phasing out its extra voluntary cuts on 1 million bpd from July.
Fresh signs of US economic recovery speeding up, added to positive sentiment, but traders remain concerned, as global oil demand recovery remains fragile, mainly due to the situation in Europe, which imposed fresh lockdowns due to rising number of new coronavirus cases.
Daily technical studies remain mixed but near-term action continues to be underpinned by rising daily cloud, which contained recent dips, keeping bias with bulls.
Although the weekly action is on track to end in Doji candle, positive signal is expected from the fifth straight weekly close above psychological $60 support.
Fresh bulls need today’s close above cracked Fibo barrier at $61.34 (38.2% of $67.95/$57.25 pullback) to confirm positive stance.
Key supports lay at $60 (psychological) and $59.39 (daily cloud top).
Res: 61.34; 61.72; 62.10; 62.37
Sup: 61.00; 60.54; 60.28; 60.00