WTI: Downside opening up towards $ 69.50 amid OPEC output boost talks

Looks vulnerable amid OPEC, non-OPEC output lift talks, stronger USD adds to the weight.
Technical set up also indicate further downside risks, with a test of 0.6950 imminent.

Dhwani Mehta FXStreet

WTI (oil futures on NYMEX) extends its losing streak into a fourth-day today, as rising worries over the latest report that the OPEC and non-OPEC producers are considering increasing the output by 1 mln bpd, adds to the ongoing sell-off in oil.

OPEC and Russia are said to ease supply curbs to offset disruptions in Venezuela and an expected drop in Iranian exports. However, Russia’s Energy Minister Novak declined to comment on the same, saying that all proposals will be discussed in June’s Vienna meeting.

Also, adding to weakness in oil prices, the US dollar remains broadly bid following renewed geopolitical concerns surrounding the US and North Korea. Markets now await the US durable goods data and Fed Chair Powell’s speech for fresh dollar trades, which could have a major bearing on the USD-sensitive oil.

WTI Technical levels

According to Jason Sen, Director at DayTradeIdeas.com “WTI Crude lower as expected but we are now oversold in the short term so could bounce in to the weekend (no guarantees!). HOWEVER ,LONGS ARE TOO RISKY - WE USE THIS BOUNCE TO SELL IN TO SHORTS. A high for the day certainly possible at 7150/60 but above 7190 could see us retest important resistance at 7280/7300. Bulls require a close above 7320 to be back in control next week.”

“A correction exactly as predicted with 7060 target hit. A WEEKLY CLOSE BELOW 7020 IS A BIGGER WEEKLY SELL SIGNAL FOR THE START OF NEXT WEEK. Targets: 6960/50, 6925/20, perhaps as far as 6875/65,” Jason adds.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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