- West Texas Intermediate (WTI) crude oil sees an uptick, buoyed by OPEC+’s revised demand outlook and production shifts.
- OPEC+ report indicates an increase in oil production, particularly from Iran, Angola, and Nigeria, countering concerns over a slowing Chinese economy.
- US Energy Information Administration (EIA) forecasts that a slight decrease in US oil production and Fed hawkish remarks could dent Oil’s demand.
West Texas Intermediate (WTI), the US Crude Oil benchmark, advances more than 1% on Monday, courtesy of an upward revised outlook for Oil’s demand, OPEC+ reported, easing off worries that a global economic outlook could influence prices, amongst less demand woes. WTI is trading at $78.18.
West Texas Intermediate benefits from OPEC+’s optimistic demand forecast and production changes
A report from the Organization of Petroleum Exporting Countries and its allies (OPEC+) upward revised oil production, disregarding fears linked to a weak Chinese economy, which could dent oil demand. OPEC+ added that production rose due to production increases in Iran, Angola, and Nigeria.
On the contrary, a report from the US Energy Information Administration (EIA) said that US oil production would rise slightly less than expected previously, which was blamed on a lower demand. Alongside that, a hawkish stance by the US Federal Reserve (Fed) Chairman Jerome Powell, suggesting that it could raise rates, stroked fears about WTI’s demand outlook.
Another Fed hike could underpin the Greenback (USD), a headwind for US dollar-denominated commodities, which could weigh WTI prices.
Nevertheless, Saudi Arabia and Russia pledge to maintain a 1.3 million barrel cut toward the end of 2023, which would likely keep Oil’s price underpinned and most likely at around current prices.
WTI Price Analysis: Technical outlook
From a technical standpoint, WTI is testing the 200-day moving average (DMA) at $78.19, which would open the door for further upside, like the $80.00 per barrel barrier. A breach of the latter would expose the November 7 high of $81.01, ahead of challenging the 50-DMA at $82.45. On the flipside, if the 200-DMA holds, a WTI dive toward the November 8 swing low of $74.96 is on the cards.