Oil Price Forecast / Update: Steady Amid OPEC+ Cuts, Economic Concerns, Stronger Dollar

Highlights

• Oil prices remain steady, heading for third weekly gain
• OPEC+ pledges further production cuts
• Tightening supply supports upside potential

Overview

U.S. West Texas Intermediate crude oil futures are edging higher on Thursday while continuing to consolidate inside its weekly trading range. After gapping nearly $4.00 higher on Monday, following surprise production cuts by OPEC+ over the weekend, the trade has been subdued as traders await the next signal on supply/demand.

At 12:00 GMT, June WTI crude oil is at $80.96, up $0.33 or +0.41%. On Wednesday, the United States Oil Fund ETF (USO) settled at $70.27.

Oil Prices Steady, Poised for Third Weekly Gain

Oil prices remained steady on Thursday, heading for a third straight weekly gain. This comes as OPEC+ pledged further production cuts and U.S. oil inventories dropped, despite concerns about global economic growth due to weak U.S. economic data.

While the U.S. services sector and job openings slowed down in March and February respectively, the tightening supply situation in the oil market continues to support the upside potential.

However, a stronger dollar may hamper the bullish momentum, as it tends to make crude more expensive for holders of other currencies.

Daily June WTI Crude Oil Technical Analysis

The main trend is up according to the daily swing chart. A trade through $81.81 will signal a resumption of the uptrend, while a move through the main top at $82.98 reaffirms the trend. The main trend will change to down on a trade through $64.58.

Due to the prolonged move up in terms of price and time, crude oil is vulnerable to a potentially bearish closing price reversal top. But it has to take out $81.81 first, then close lower for the session.

The nearest support is the Fibonacci level at $78.06 and the Jan. 23 main top at $82.98.

Daily June WTI Crude Oil Technical Forecast

Trader reaction to $80.42 is likely to determine the direction of the June WTI crude oil futures contract on Thursday.

Look for an upside bias to develop on a sustained move over $80.43 with potential targets $81.81, followed by $82.68 – $82.98. The latter is a potential trigger point for an acceleration to the upside.

A downside bias could develop on a sustained move under $80.42 with potential to extend the selling into $78.06.