The oil market continues to recover. Since the opening of the day, WTI crude oil quotes have added more than 1% and are quoted at $ 54. The last time at this mark, oil was in February 2020.
The prices were supported by reports that the OPEC + countries in December almost 100% fulfilled the agreement to cut oil production. A Reuters poll showed that OPEC countries produced 25.75 million barrels per day in January, which is 160 thousand barrels per day more than in December. Under the OPEC + agreement, which entered into force on January 1, the total production was to be increased by 500 thousand barrels per day. Thus, the actual increase was significantly less than planned. The less significant increase in supply was due not only to the voluntary restraint of the members of the oil alliance, but also to the forced suspension of production in Nigeria.
It should be noted that in February, the global oil supply may sink even more. As a reminder, from February 1, Saudi Arabia will produce 1 million barrels per day less. This decision was taken unilaterally and is intended to stabilize supply and demand in the face of weak global economic activity. Earlier, another member of the OPEC + alliance, Iraq, also announced plans to reduce the volume of oil production to 3.6 million barrels per day, thereby compensating for the excess production in previous periods, which became a violation of the terms of the energy pact.
This week, market participants will follow the results of the OPEC + technical committee meeting on Wednesday. The committee is not expected to recommend a change in production. The ministerial meeting will take place later on 4 March. The sentiment of traders in the coming days may also be influenced by data on changes in US oil reserves. In the event that the report reports on the next reduction in reserves, WTI crude oil may gain a foothold above $ 55 per barrel. Given the above, “long” positions remain a priority.
WTI BuyStop 54.25 TP 56.50 SL 53.50
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