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WTI Crude futures are currently trading at $36.78-lower by 0.10% as compared to the previous closing price.
Brent crude futures were trading at $39.61-higher by 0.17% as compared to the previous closing price. The contract hit its highest level ($40.53) earlier in the session.
Crude prices dropped today as doubts emerged about the timing and scale of a potential extension to the agreement by the OPEC+ to lower oil production.
Oil prices were also pressured as US refined product inventories rose in the week, increasing concerns about demand. Russia and Saudi Arabia have a deal to extend crude production cuts by a month. According to market sources, a police meeting tomorrow rather than later in this month was unlikely.
Crude prices dropped earlier in the session when Bloomberg reported that tomorrow’s virtual meeting was in doubt. Crude prices gained in recent weeks on the expectation of improved demand after the pneumonia-causing virus pandemic reduced global consumption by about 30%.
The OPEC and other oil-producing nations agreed to lower supply by 9.7 million barrels per day in April. The deal came into effect from the 1st of May.
The OPEC+ talks have been focusing on keeping the current level of supply cuts beyond the end of this month.
Crude prices also dropped on reports that Gulf OPEC producers are not discussing extensions to the supply cuts beyond this month.
U.S. Baker Hughes Oil Rig Count for the current week is scheduled to be released on Friday at 1 pm ET. The U.S. energy services firm Baker Hughes said in its report on Friday (29th May) that the U.S. energy firms decreased the number of rigs looking for new oil by 15 to 222 for the week ended 29th May.
Adding to supply-side data, reports which are published by the API and the EIA every week, the API reported on Tuesday that U.S. crude supplies dropped by 0.500 million barrels for the week ended May 29. The EIA reported today that U.S. crude inventories fell by 2.077 million barrels for the week ended 29th May.
On the technical front, the RSI is currently at 67.22% and suggests that the market can move in the downward direction. The current price is above the MA5. The %K has crossed the %D from above to the downside at around 93% and suggests that the market can move in the downward direction.
Overall Bias is Negative and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Sell At 36.90 Take Profit At 36.25 Stop Loss At 37.20