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Oil Edges Lower Following OPEC+ Decision

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December 01 2023 01:32AM

Oil prices edged lower in the wake of OPEC+’s decision to deepen production cuts and ING said the market reaction indicates concerns that the announced cuts were voluntary, suggesting it’s becoming increasingly difficult for member states to agree on group-wide action.

New additional cuts of around 900,000 barrels a day are expected in the first quarter of next year, but “these will be brought back gradually to the market after 1Q depending on market conditions,” ING added.

Rystad Energy said the result of OPEC’s meeting marked a “bittersweet victory” for group leader Saudi Arabia, and the subsequent drop in oil prices suggests the market was disappointed with the outcome, one because the cuts are short-term and also because the group had to rely on voluntary cuts.

WTI oil’s two-month corrective decline has begun to ease, based on technical charts, Oanda said.

Over the past two weeks, WTI oil formed two consecutive weekly “long-legged doji” candlestick patterns, which suggest that bearish sentiment has started to show “hesitation and indecisiveness” regarding a potential further fall, Oanda said.

Also, the daily relative strength index momentum indicator has continued to edge higher recently. On the hourly chart, WTI oil has formed a possible minor “inverse head and shoulders” bullish reversal pattern, Oanda added, pegging support at $74.30/bbl and resistance at $79.80/bbl.