The Best Investment Manager’s Analysis on WTI Crude Oil Prices

WTI crude oil prices opened below $56 after OPEC+ announced another output hike, matching May’s surprise increase. Despite rising geopolitical risks, prices remain unaffected for now. Support levels are being closely watched at $55.12, with potential downside targets at $54 and $49.33.

Summary

WTI crude oil prices are experiencing a downward trend since March, as OPEC+ continues to increase production. Global supply is rising, and macro risks are mounting, leading to bearish momentum. Although tensions in the Middle East could stir volatility, prices are currently focused on supply dynamics.

OPEC+ Boosts Crude Production Again

WTI crude oil prices have hit their lowest level since early 2021 due to OPEC+’s decision to increase production. The group, led by Saudi Arabia, agreed to raise output by 411,000 barrels per day in June, following a similar increase in May. This aggressive supply boost is raising concerns about a growing surplus amid weakening demand signals.

Geopolitical Tensions Create Reversal Risk

Despite escalating tensions in the Middle East, particularly between Israel and Yemen’s Houthi rebels, the focus remains on supply dynamics. The geopolitical backdrop has not been able to counter the bearish tone set by OPEC+’s production increases.

WTI Remains Sell-On-Rallies Play

Technical indicators suggest that WTI crude oil prices are likely to continue on a downward trajectory. Support levels at $55.12, $54, and $49.33 are key areas to watch for potential downside targets. Resistance levels are expected around $60 and $65.

Overall, the current market conditions indicate a bearish outlook for WTI crude oil prices, with potential downside risks outweighing upside potential. Investors should closely monitor supply dynamics and geopolitical developments to make informed decisions about their investments.