OPEC and its allies including Russia, agreed Friday to deepen output cuts in an effort to trim the global supply and stabilize prices. The move is designed to combat stagnant global economic growth blamed on the U.S.-China trade war. OPEC+ stopped short of pledging action beyond the first quarter of 2020, causing analysts and traders to question the impact of the latest curbs.
According to reports, the cuts will expand the existing agreement by an extra 500,000 barrels per day (bpd) reduction in the first quarter next year, through tighter compliance and some adjustments. OPEC’s current agreement is a supply cut of 1.2 million bpd and the increased amount represents about 1.7% of global oil output.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman also told reporters that its quota would be an additional 167,000 barrels per day through March 2020. He also said that the kingdom would continue to exceed its quota by 400,000 barrels a day, which means the overall production cut will actually be closer to 2.1 million barrels a day.
Weekly Technical Analysis
Weekly January WTI Crude Oil Technical Analysis
Weekly Swing Chart Technical Analysis
The main trend is up according to the weekly swing chart. A trade through $61.48 will reaffirm the uptrend.
The main trend will change to down on a move through the last swing bottom at $50.69. This is highly unlikely, however, the market is up nine weeks from its last main…