U.S. West Texas Intermediate crude oil futures are in a position to post a technically bearish closing price reversal top on the weekly chart. While this chart pattern may not lead to a change in the trend, it doesn’t indicate that the selling is greater than the buying at current price levels.
Some of the selling pressure may have been fueled by the Tweet from President Trump over the weekend that said he had reached an agreement with the Saudis to increase production by as much as 2 million barrels per day, but we all know that the number was well off the amount the Saudis could conceivably deliver at this time. However, it did increase the focus on the tremendous supply issues the crude oil market is facing at this time. The news also brought attention to reports of increasing Saudi production.
Most of the talk this week has been about supply with a few smatterings of comments on demand.
This week’s price action indicates the market appears to have absorbed the recent announcement that an OPEC-led group and Russia will raise output by about 1 million bpd. Most of the rally has been fueled by supply disruptions in Canada, Venezuela and Libya as well as the looming sanctions against Iran.
Earlier in the week, Reuters reported that OPEC pumped 32.32 million bpd in June, up 320,000 bpd from May. The June total is the highest since January 2018.
King Salman said Saudi Arabia is ready to deploy the nation’s spare capacity to add…