Pre Open US - US Oil 31 July 2023

Oil prices are poised to register their largest monthly gains in over a year, thanks to the anticipation that Saudi Arabia will extend voluntary output cuts into September and tighten the global supply. Analysts, including Goldman Sachs, and oil executives like ExxonMobil's CEO Darren Woods, predict that demand will remain resilient and reach a record high in the coming months. Additionally, the market foresees Saudi Arabia and OPEC+ leaders extending their 1 million bpd production cut into September. The Kingdom is currently reducing production by 1 million bpd in July and August, along with an additional 500,000 bpd reduction as part of the OPEC+ cuts that began in May. Russia is also committed to a 500,000-bpd cut in August oil exports, and signs indicate that Russian crude shipments are already declining. Furthermore, the macroeconomic sentiment has improved, as evident from the recent U.S. inflation data showing a slowdown in price increases. China is expected to support its economy after experiencing slower-than-expected growth in the second quarter.

WTI crude oil making a new breakout of the last resistance level at 81.3 and going toward the next target at 83.5. The 83.5 target will be a real challenge for WTI as it represents a historical resistance level from 22 November.