WTI crude oil prices declined on Monday following OPEC+’s decision to extend voluntary output cuts into the second quarter, aiming to stabilize short-term crude markets. OPEC+ will maintain the 2.2 million barrels per day reduction, with Saudi Arabia continuing its 1 million barrels per day cut, keeping its production around 9 million barrels per day.
Despite this, energy strategist Walt Chancellor suggests the market had anticipated the extension, thus limiting its impact. Russia, another major player in OPEC+, will also cut its production and export supplies. The decision reflects OPEC+’s commitment to maintaining oil prices above $80 per barrel, amid concerns over weaker than expected demand in the upcoming quarter. This comes despite factors like OPEC+ supply cuts and geopolitical tensions that have kept oil prices within a narrow $75 to $85 range since the year’s start.
Technically, today is the first lower day in five and only the fourth in a month so bullish traders aren’t too worried about the setback. Holding above the 200-day moving average or long-term trend indicator at $76.66 is helping to put bullish traders at ease.
