WTI Crude – Will oil prices encourage Russia and Saudi Arabia to extend cuts?

  • Growth concerns weigh on demand expectations
  • OPEC+ meeting later this month eyed for further cuts
  • WTI hits lowest level since July

Oil prices have been trending lower again in recent days after rebounding on Tuesday, around the October lows in the case of WTI.

There are clearly concerns around demand going into next year, particularly around China, which OPEC this week sought to relieve, to no avail.

The recent trend may make it difficult for Saudi Arabia and Russia to allow their unilateral cuts to expire at the end of the year, which is something markets may be gradually pricing in.

The lack of a commitment to extend so far may reflect a desire to not but as we’ve seen so often in the past, the producers will do whatever it takes to support the price. The question may be whether they can get others on board.

Four-month low in WTI

After running into resistance around $80, near the October lows, WTI has been trending lower once more and some interesting tests lie ahead


Source – OANDA on Trading View

It has already fallen back to the next test of support around $74 where it appears to be stalling. That said, today’s sell-off has been quite strong so it will put that support level to the test.

Below here, $70 stands out as another possible support zone, although arguably $68 below here is more significant having provided strong support earlier in the summer.

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam