API inventories fell more than 8M
Russian and Saudis disagreements ended with a delay in OPEC and its allies, known as the OPEC+ meeting. Therese two major world Oil producers, after the outbreak of the Delta virus in many countries around the world, have disagreements on the scale of production. Therefore, the official representative said that the meeting would be postponed until tomorrow to allow more time to resolve differences over production policy.
According to the general plan, the OPEC+ members, including Russia, have considered supporting increased production. However, given the high spread and latest lockdowns in many countries caused by the Delta virus, demand in the oil market can be hit and decrease once again. In the current situation, even countries with high vaccination rates, Like the US, UK, and Israel, recently had a sharp increase in new infected numbers. In the Asia-Pacific region, Sydney in Australia started the lockdown from June 26 until July 9.
In Indonesia, new virus infections exceeded 20,000 for the first time on June 26, reaching a maximum of 21,342; Malaysia announced the extension of the general lockdown. Bangkok in Thailand also announced the implementation of 30-day restrictions from June 28. In Japan, the Japanese government may consider extending the state of emergency for up to 2 to 4 weeks.
Considering the current situation, Saudi Arabia and some other members maintain a cautious attitude towards the oil market and worry that a new oversupply will be triggered after the summer. On the other hand, Russia is relatively optimistic. Given that there is less budget pressure to maintain high oil prices prefer to maintain a high level of production rather than decrease the production.
Besides that, Moderna's announcement about the effectiveness of its vaccine on multiple mutant viruses has also provided some support for the bulls while Americans are still holding the sanctions against Iran.
After tomorrow's OPEC+ meeting, we also need to follow the US labor market report. A positive report will be supportive for the Oil market.
WTI Technical Overview:
As you can see in the below chart, since June 22, WTI has a side movement between $72.50 and $73.50. In the H4 chart, RSI sits at 61, price is above OBV trend line, and EMA crossing strategy started an uptrend signal. Therefore, technical indicators supported the higher numbers in the middle-term, while the latest market estimates were also above $80 per barrel for this summer.
