Crude oil prices are now recovering to as much as $44 from a recent downward trend due to the growing investor unease on the OPEC oil production cap. The outlook which was initially agreed upon at the conclusion of the International Energy Forum in Algiers before the end of September recently led the price of crude oil to peak to as much as $51. The lack of development on the production cut then led the price to decline despite the nearing formal OPEC meeting at the end of November in Vienna.
The West Texas Intermediate (WTI) meanwhile declined by 0.2% settling at $43.32 per barrel dropping the lowest at $42.20. The Brent crude futures are down by 0.72% closing at $44.43 per barrel from its lowest drop of $43.57. According to OPEC,
The conclusion of the U.S. Presidential Election resulting in a victory for Republican Donald Trump despite not having placed a huge impact on the prices of oil did not drive crude oil to peak either leaving the direction of oil prices in the hands of the OPEC production cut.
Despite the falling prices, a number of experts and finance researchers are still positive on oil’s recovery to $60-$70 considering OPEC experts and member countries are still yet to meet formally over the output freeze at the end of the month which will sharply lead the oil prices to suddenly peak.
Aside from the lack of market confidence in the OPEC’s capability to implement an oil production freeze among its member countries, Saudi Arabia, Iran, and Iraq have
Crude Oil Price Direction
From the record of a three-month low at yesterday’s close, the price of crude oil has now recovered a bit steadying the price direction of the commodity although this might not lead the price to recover fully as the price recently touched $45.95 last week from a decline of more than a week before declining to as low as $43 again. The recent jump in the price of crude oil was recently led by reports that the forecasted production numbers for the next month would fall to as low as April’s reported 4.5 million barrels per day decrease in production.
Although the past couple of weeks or trading sessions has not yet led to an oversold price, the RSI indicator is now pointed upwards from recently touching the 31 level. This shows that the stock was almost oversold given the recent price of the commodity the past week. Light Crude Oil is currently trading at around $44 signaling an opportunity for investors to sell as the stock shows a lot of potential to drop to as low as $40 given its recent drop to $44 from an all-time high of $51 the past month. So far the price has not shown any signs of recovering back to $60 much less the recent high of $51. This shows how big the impact of an OPEC agreement would be and how a successful meeting in Vienna between OPEC member countries would lead the oil price to recover back to as much as $70.