The recovery in crude oil price on both the WTI and Brent benchmarks continued today after Oman committed to further reduce its production quota, in response to Saudi Arabia’s call for OPEC members to do same.
Omani Oil Minister Mohammed al-Rumhy provided this insight, stating that Oman would support efforts initiated by Saudi Arabia and other OPEC members from the Gulf region to deepen oil cuts. According to al-Rumhy, Oman would be cutting 10,000 – 15,000 barrels per day in June.
Recall that Saudi Arabia had initiated a further reduction in the OPEC + quota by committing to reduce its production output by 1 million barrels per day. Crude oil price on the Brent benchmark is currently up by 2.48% as it aims for a 3rd straight winning session.
Brent crude oil price broke out of the bullish pennant with yesterday’s 6.65% surge, which brought it into contact with the 31.69 resistance. Today’s price candle has taken crude oil price marginally above this price level as the crude oil price aims to establish further price advance towards the elusive $40 mark.
If there are two successive daily closing prices above this level, then we could witness a run towards the $40 mark, with 35.61 and 38.56 being the two resistance pitstops that may restrict this advance. Attainment of the resistance at 41.43 takes crude oil above the $40 mark.
On the flip side, there could be a retest of the 28.38 price level if crude oil price advance falters at 31.69. Downside targets remain at 24.68 as well as the site of the Nov 2002 low (22.35).