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WTI and Week ahead
By: Ahura Chalki
OPEC’s Joint Ministerial Monitoring Committee (JMMC) will meet on Tuesday and Wednesday to decide about the supply cut after ending the current 9.7Mbpd, which will end in July. The market expectation from OPEC and its allies including Russia known as OPEC+ is to ease the supply cut from 9.7 to 7.7 and it caused the pressure on WTI price from the beginning of weekly trades. West Texas Intermediate currently trading 1.5% lower at $39.90 and UK oil is down by 1.2%.
On the other hand, the current level of $40 is a key level, since a bit higher than this price will promote more U.S. producers to start drilling again even as the number of operating oil and natural gas rigs hit a record low for a 10th straight week. Last week, U.S. Baker Hughes Oil Rig Count hit the low level of 181, however around $45 can be good motivation for them to be back into the market, which is not the favor of Russian.
For the week ahead, it is not just about OPEC meeting, we will have central banks interest rate decisions as well as it is the first week of Q2 earning reports which positive results can help the market and bring more hopes for Oil investors, as well.
In a weekly chart. WTI could cover the gap at $41.57. But it was not enough to reach 61.8% Fibonacci from its January high to April low. However, it is still above 50% of Fibo, keeps the hope alive for bulls, but breathing above $41.57 needed to push the market higher.
In daily chart, 20 DMA sits at $39 and 50 DMA at $36, which is key support, and breaching under this level will bring the bears back to the game.
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