Oil prices on both sides of the Atlantic are seen consolidating the massive drop induced by disappointment on the OPEC’s decision announced a day before.
Oil: Focus shifts to US rigs count, GDP data
After having bottomed at six-day lows of $ 48.27 last hour, the black gold is seen making minor-recovery attempts and regains $ 48.50 barrier, as dust settles over OPEC’s decision aftermath.
Oil prices plummeted 5% on Thursday after the OPEC and non-OPEC producers agreed to extend the oil output cut deal for nine months. Markets sold-off oil aggressively as they were expecting the cartel to announce deeper cuts to output.
Moreover, skepticism seeped into market whether the extension of the OPEC output cut deal will turn out to be actually effective, in order to limit supplies and stabilize oil markets. Also, sell the fact trading struck oil markets, as the OPEC decision on extension of the cuts was widely expected.
Focus now shifts towards the US rigs count and prelim GDP figures due later in the day for fresh impetus. Meanwhile, oil traders and analysts are expecting large volumes of crude to draw from storage tanks across the United States in coming weeks, which could offer some respite to the prices.
At the time of writing, WTI loses -0.55% to 48.63, while Brent is down -0.37 to $ 51.27.
WTI technical levels
A break above $ 49 (round number) could yield a test of $ 49.60 (May 18 high) beyond which $ 50 (psychological levels) could be tested. While a breach of $ 48.27 (six-day low) would expose $ 47.75 (May 15 low), below which downside opens up for a test of $ 47.35 (May 11 & 12 low).
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