WTI RISES AS OPEC INDICATES IT MAY EXTEND SUPPLY CUTS
WTI Crude futures are currently trading at $63.33- higher by 0.77% as compared to the previous closing price. The contract touched a three-week high of $63.92 earlier in the session.
Brent crude futures were trading at $71.09-lower by 0.12% as compared to the previous closing. The contract hit its highest level since 26th April ($73.40) earlier in the session.
Crude prices advanced earlier today before paring some of its gains as OPEC signaled it was likely to maintain production cuts that have helped boost prices in 2019 while increasing Middle East tensions provided further support.
Saudi Energy Minister Khalid al-Falih said over the weekend there was a consensus among the OPEC and its allies to drive down crude oil inventories gently.
The Joint Ministerial Monitoring Committee meeting in Saudi Arabia over the weekend did not make any solid recommendations, leaving a decision on policy for a meeting of OPEC+ group next month. OPEC is scheduled to meet on June 25-26 in Vienna, to discuss supply policy.
OPEC data showed that oil inventories in the developed world surged by 3.3 million barrels MoM in March, and were 22.8 million barrels above their five-year average.
U.S. President Donald Trump said on Sunday that a conflict would be the “official end” of Iran, while Saudi Arabia said it was ready to respond with “all strength” and it was up to Iran to avoid war.
The U.S. energy services firm Baker Hughes said in its report on Friday that the U.S. energy firms last week decreased the number of rigs looking for new oil by 3 to 802 for the week ended 17th May. It was the fourth time in the last five weeks that companies have reduced the number of oil rigs.
Adding to supply-side data, reports which are published by the API and the EIA every week, the API is scheduled to report U.S. crude supplies for the week ended 17th May on Tuesday. Previously, the API reported that U.S. crude supplies rose by 8.600 million barrels for the week ended May 10. The EIA will report US crude inventories for the week ended May 17 on Wednesday. Previously, the EIA reported that U.S. crude inventories rose by 5.431 million barrels for the week ended May 10.
On the technical front, the RSI is currently at 55.31% and suggests that the market can move in the downward direction. The current price is above the MA5. The %K has crossed the %D from below to the upside at around 28% and suggests that the market can move in the upward direction.
Overall Bias is Positive and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Buy At 63.28 Take Profit At 63.88 Stop Loss At 63.00