OPEC has been cutting crude output by 1.8 million bpd to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018. The organization is set to meet in Vienna on June 22.
On May 25th, 2018 Reuters reported that OPEC and Russia could raise oil output by June after the White House raised concerns that oil prices were too high. The Organization of the Petroleum Exporting Countries and non-OPEC producers led by Russia have agreed to curb output by about 1.8 million barrels per day (bpd) until the end of 2018 to reduce high global oil stocks, but the inventory overhang has now fallen close to OPEC’s target.
Prices were also held back by geopolitical concerns, including impending U.S. sanctions against Iran, which produces 4% of global oil supplies. Secondly, the President Donald Trump cancelled a planned summit with North Korea.
Vice Foreign Minister Kim Kye Gwan said Friday that his country still wants to pursue peace and said it would give Washington more time to reconsider talks. He added that North Korea “inwardly highly appreciated” Trump for agreeing to the summit, and hoped the “Trump formula” would help lead to a deal between the adversaries.
The U.S. President also held out hope that he and Kim could meet in the future: “Nobody should be anxious. We have to get it right,” he said. Secretary of State Mike Pompeo said there were “a lot of dial tones” as the U.S. sought to work out logistics with North Korea to hold the summit.
The upcoming weekly installment of drilling activity from Baker Hughes on June 1st, 2018 will provide investors with fresh insight into U.S. oil production and demand.
Since my last analysis, on May 26th, 2018 in the same chart in different time frames, I've found that all of the above mentioned facts are evidence enough to encourage oil bears at the current levels of WTI Crude Oil futures. Crude Oil futures look ready to continue their downward voyage during the upcoming weeks.
No doubt that the WTI Crude oil futures will be passing through a volatile phase during this downward voyage due to futile attempts by oil bulls amid shifting news flow during the upcoming week. I expect the WTI Crude Oil futures to pass through the following trading zones during the week of May 27th, 2018. For more details, listen to this:
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