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Investors Pending OPEC+ Decisions

8/3/2022 1:43 PM

The price of North American WTI Crude Oil is correcting sideways at 93.77.

Today at 12:00 (GMT+2), the ministers of the OPEC+ member countries will gather for a meeting via videoconference, during which they will hear a report with market development scenarios for the coming months, after which the Ministerial Monitoring Committee will make recommendations on the levels of production of "black gold" for September. Investors are watching the upcoming meeting with interest for several reasons. First, a new secretary-general, Haytham Al Ghais, who took office on August 1, will be introduced, succeeding Mohammad Barkindo. The second reason lies in the timing of the implementation of the OPEC+ agreement: the fact is that the participating countries plan to reach pre-crisis levels of oil production by September, and in order to meet this deadline, production levels gradually increased to 432 thousand barrels per day in June and up to 648 thousand barrels per day in July. However, OPEC+ is currently 2.84 million barrels per day behind schedule, according to the OPEC+ Technical Committee, which could force the organization to take more "hawkish" moves at today's meeting. Almost all parties to the deal are now at the limit of their production capacity, with only Saudi Arabia and the United Arab Emirates having spare capacity, which are likely to increase production levels further.

In this regard, there is no need to talk about a stable uptrend. In the event of a change in current plans, one should expect a continuation of a local decline in energy quotations, as world demand is not yet able to cope with such a high supply.

On the global chart of the asset, the price is kept within the local downward channel and may make a new attempt to overcome the support level in the near future. Technical indicators confirm this probability by holding a sell signal: fast EMAs on the Alligator indicator are below the signal line, narrowing the range of fluctuations, and the AO oscillator histogram is forming new ascending bars, still being in the sell zone.

Support levels: 91.68, 84.10. | Resistance levels: 97.57, 106.74.

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