The price of oil is on track to increase for the second consecutive week as it attempts to retrace the decline from the May high ($119.98), and it seems as though the upward adjustment in OPEC’s production schedule will do little to bring down crude prices amid the resilience in energy demand.

Fresh updates from the Energy Information Administration (EIA) show US crude inventories contracting for three straight weeks, with stockpiles narrowing 5.068M in the week ending May 27 amid projections for a 1.35M decline.

The data suggests oil consumption will remain robust in 2022 even though OPEC’s most recent Monthly Oil Market Report (MOMR) warns that “world oil demand is projected to average 100.3 mb/d, which is 0.2 mb/d lower than the previous month’s estimates,” and it seems as though the group will retain a gradual approach in tackling high energy prices as “July production will be adjusted upward by 0.648 mb/d.”

In turn, developments coming out of the US may sway oil prices ahead of the next OPEC Ministerial Meeting on June 30 amid the ongoing decline in crude inventories, with a deeper look at the EIA report showing weekly field production holding steady at 11,900K for the third consecutive week.

With that said, current market conditions may keep the price of oil afloat as signs of limited supply are met with indications of robust demand, and crude may attempt to test the yearly high ($130.50) ahead of the next OPEC Ministerial Meeting as it retraces the decline from the May high ($119.98).

CRUDE OIL PRICE DAILY CHART

(Click on image to enlarge)

Source: Trading View

• The price of oil appears to be on track to test the May high ($119.98) following the failed attempt to close below the $112.80 (161.8% expansion) to $113.70 (78.6% expansion) region, with a break/close above the $120.90 (100% expansion) area bringing the yearly high ($130.50) on the radar.
• Looming developments in the Relative Strength Index (RSI) may show the bullish momentum gathering pace as it approaches overbought territory, with a move above 70 in the oscillator likely to be accompanied by higher oil prices like the behavior seen earlier this year.
• However, lack of momentum to clear the May high ($119.98) may push the price of oil back towards the $112.80 (161.8% expansion) to $113.70 (78.6% expansion) region, with the next area of interest coming in around $108.10 (61.8% expansion).