WTI oil price eased further in early Thursday, holding in red for the third straight day and pressured from profit-taking from the latest rally which stalled at psychological $120 barrier.
Traders focus on today’s OPEC+ meeting, as the cartel members signaled they may cover up the drop of oil output in Russia, due to the sanctions.
Saudi Arabia said it is ready to increase its production if Russian output falls substantially, as Russia is already producing below target of 10.4 million barrels per day.
Analysts do not expect the cartel to change its policy when Russian Foreign Minister Lavrov is visiting Saudi Arabia, but see the OPEC+ sticking to its existing decision for modest monthly increase in output, despite tight oil supply and rising demand from the US and EU as summer driving season starts.
The pullback from new nine-week high ($119.96) so far looks like a healthy correction within a larger uptrend, with dips to ideally find ground at $110 zone (20DMA / psychological / Fibo 38.2% of $92.92/$119.96 rally) to keep larger bulls unharmed.
On the other side, bull-trap above the upper channel trendline and strong loss of bullish momentum on daily chart, weigh on near-term action and threaten of deeper correction on sustained break of pivotal supports at $110.00 zone, though more significant drop in oil price, which would violate lower pivots at 103.25 (Fibo 61.8%), 102.81 (lower bull-channel boundary line) and 109.06 (daily cloud top / daily Kijun-sen) is seen as quite unlikely in the current situation.
Res: 113.09; 113.58; 114.96; 115.37.
Sup: 111.62; 110.00; 109.63; 108.58.