Traders Await OPEC+ Resolve on Supporting OilCrude oil prices rebounded strongly, recouping some of their overnight losses as expectations strengthened on OPEC+ resolve in supporting oil prices by sticking to their status quo.
At the time of drafting this report, the British-based oil derivative, (Brent crude) was up by about a percent, as it traded at above $63 a barrel and the West Texas Intermediate futures prices bounced above the $60 mark.
OPEC+ members are scheduled to meet later today, principally on crude oil production for May, though some market pundits argue that the all-important meeting might result in no significant changes in production, Oil traders are likely to judge on the level of resentments in keeping oil outputs limited.
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In the past few weeks, oil traders had a rough patch dealing with high volatility as the short-lived bounce from the Suez Canal obstruction has given way to another problem after France recently announced it was going back into the lockdown abyss.
Present price actions reveal despite Thursday’s ongoing bullish run, oil bears still hold the ace as growing concerns of a fragile demand recovery coupled with the new COVID-19 variants continual raising alarm bells around financial markets globally.
Still, a significant number of traders would be expecting a worst-case scenario, because OPEC will at one point have to reintroduce some latent supply while it can before that becomes much more difficult in the longer term particularly before U.S shale producers take advantage.
But at the heart of it all, the current bullish run seems to be riding mainly on the back of OPEC+ production curbs —or rather, the fact that they will agree to hold production steady in April instead of ramping up production as the market had anticipated.