OPEC Is Trying Its Best

Saudi Arabia To Cut Production Further

Official commentary from Saudi Arabia, the largest oil producer within the OPEC cartel, has also been very supportive of higher prices.

This week, Khalid al-Falih, the Saudi Arabian Energy Minister told reporters that the kingdom will be slashing its oil output even deeper, to roughly 9.8 million barrels per day in March. This is 500k barrels more than the level required by the OPEC production cut deal which went live in January.

Technical Perspective

(Click on image to enlarge)

forex oil

Despite the news of a further inventory build, oil prices remained positive this week, trading up off initial low levels. They ended the week back in the upper half of the recent four-week range. For now, price is battling to get back above the 54.47 level which remains a key short term resistance. Above there, the focus will turn to an eventual retest of the broken bullish trend line from 2016 lows.

However, the path to higher prices is tricky due to the amount of structural resistance overhead. The structural resistance was created by the many swing lows price forged on the bull run from 2016 to late 2018. With plenty of these levels overhead, any move higher is likely to be choppy with a lot of break-and-retest opportunities.

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