Oil market is extending near-term recovery today, driven by recent reports that OPEC+ has reached a preliminary agreement to cut oil production by over 1 million barrels per day. This development, reported by two OPEC+ sources to Reuters, has sparked optimism among traders and investors, leading to an extension in the near-term recovery of oil prices.
The proposed reduction is significant, as it includes Saudi Arabia’s continuation of its voluntary cut of 1 million bpd, which has been in effect since July. Additionally, the deal involves further contributions from other OPEC+ members, marking a concerted effort to stabilize oil prices amidst global economic uncertainties.
From technical analysis standpoint, WTI crude oil is now eyeing key resitsance level at 79.98, which is close to 80 psycholgoical level. Decisive break there will argue that whole corrective fall from 95.50 has completed with three waves down to 72.65. In this case, stronger rebound should be seen back to 81.77/91.07 resistance zone in the near term.
The momentum for this potential rebound in oil prices hinges on confirmation of the OPEC+ deal. Should the agreement be officially confirmed, it could act as a catalyst, triggering further upward movement in oil prices.
