Oil prices rebounded this week on the prospect of production cut by OPEC+. Saudi Energy Minister Prince Abdulaziz bin Salman was quoted earlier that OPEC+ has the commitment, flexibility, and means to deal with challenges and provide guidance including cutting production at any time and in different forms. However, upside is so far capped as Reuters, based on information from nine OPEC sources, said productions cuts may not be imminent, and might coincide with Iran’s return to the market.
Technically, the conditions for a stronger bounce for WTI crude oil are there. Bullish convergence conditions are seen in both 4 hour and daily MACD. A near term falling channel resistance is already broken. More importantly, 86.41 is close enough to an important cluster support at 85.92, with 100% projection of 131.82 to 93.47 from 124.12 at 85.77.
Immediate focus is now on 95.91 resistance. Firm break there should confirm near term reversal for 103.84 resistance and possibly above. Also, in case of another fall, strong support is expected from 85.77/92 to contain downside.
