WTI holds below 1H 200-MA, eyes OPEC decision
- Oil dropped for three straight days, holds below 1H 200-MA.
- OPEC, the non-OPEC committee recommends extending cuts by 9 months.
WTI oil dropped for the third straight day yesterday to a low of $56.76 and holds below the 1-hour 200-MA as investors await the OPEC decision.
As of writing, WTI front-month contract is trading flatlined at $57.30 levels. The 1-hour 200-MA is located at $57.35 levels. The upside is being capped by conflicting statements by major producers on the path for an extension of the group's supply-cut agreement.
As per Reuters report, "Kuwait's Oil Minister Essam al-Marzouq said a key monitoring committee recommended extending the group's supply-cut agreement through the end of 2018, but those sentiments were undercut by statements from Russia's oil minister, who suggested the oil market still has yet to balance"
Meanwhile, the ministerial committee overseeing the implementation of the OPEC output reduction agreement recommended a nine-month extension. However, a significant minority in the market believes OPEC could consider only a short-term extension and may keep doors open for a review in June.
Consequently, oil prices could continue to trade in the sideways manner ahead of the OPEC decision.
WTI oil technical levels
A move above $57.62 (10-day MA) would expose $58.00 (5-day MA) and $58.30 (previous day's high). On the other hand, a break below $56.76 (previous day's low) could yield a sell-off to $56.41 (Nov. 8 low) and $56.00 (psychological level).