The spot U.S. WTI crude oil futures contract has been on a bit of a rollercoaster the last two days. On Thursday, price rose to nearly $83.50 per barrel before plummeting over $5 to $78.84 per barrel as we head into Friday.
Overnight, the Organization of Petroleum Export Countries (OPEC) and non-member allied countries including Russia (OPEC +) rebuffed calls by the United States, Japan, India and other countries to drastically increase crude oil output. The OPEC + countries will stick with the current agreement to increase production by 400,000 barrels per month.
Russian Energy Minister Alexander Novak said, during a press conference that the “The decision was made previously to increase production by 400,000 (barrels per day) every month, and I underscore every month, until the end of 2022. Today the decision was reiterated to maintain current parameters which were decided on earlier.”
“From August until now, we have added 2 million barrels of additional production to the market,” Novak added. “So as planned, we are giving the market more and more volume, as it is recovering, at the same time we also see there is a seasonal drop in demand in the fourth and first quarters of the year, and also there are some signs such as a decrease in oil product demand in the EU in October, which we have observed.”
Daily US Crude Oil Technical Analysis
Looking at the above daily WTI crude oil MT 4 price chart, oil is below a rising trend line in play since August. However remains above the 50 and 100 day simple moving averages which are sloping upwards. The technical indicators are also sloping lower as the 14 day relative strength index is below its mid-line.
The U.S. oil contract broke below the rising trend line on Wednesday near $83.50 and remains on the defensive. While below $79 per barrel, the next layer of support lines up at $77 per barrel. The next layer of support is at the 50 day simple moving average at $76 per barrel.
On the upside, a daily close above $79 opens the door for the rising trend line before bringing $85 per barrel back into focus.