Oil Prices Slip on Strategic Reserve Bid and OPEC+ Talks

The US Energy Department's announcement of a bid to purchase 3.3 million barrels to refill the strategic petroleum reserve initially lifted oil prices in the session, but they eventually ended lower. On Wednesday, WTI crude futures slipped below $78 per barrel, returning to their lowest levels in nearly two months. This drop followed reports indicating that Russian Deputy Prime Minister Alexander Novak suggested OPEC+ might contemplate boosting crude production. The group of major producers is scheduled to convene on June 1 to determine output policy for the second half of the year. The existing supply agreement, which removes approximately 2.2 million barrels per day from the market, is set to expire at the end of June. Additionally, industry data revealed a surprising increase of 0.509 million barrels in US crude inventories last week, contradicting market expectations for a 1.43 million barrel decline. On the demand side, investors are eagerly awaiting the latest Chinese trade figures this week to assess the economic well-being of the world’s leading crude importer.

In oil, which is currently below the 200-day moving average and attempting to hold onto the previously mentioned 0.5 retracement level, the first notable support stands at 77.00, while the major support level below this area is seen at 75.80. Breaking below this level could potentially push the price down to the 200-week moving average level at 74.80. On the upside, the first resistance would be the broad range of 77.60-77.90. Breaking through this range could drive the price up to the range of 78.80-79.00, with the next resistance level to watch being 80.00.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
80.00	79.00	77.90	77.00	75.80	74.80