Crude Oil Commentary

OPEC+ Concerns Hit OilOil prices have collapsed lower this week with crude futures down more than 6%, fast approaching a test of the YTD lows. The move comes on the back of the OPEC+ meeting over the weekend which saw the group extending current production curbs through to the end of next year. However, details of the report have been met with uncertainty, specifically plans to reintroduce 2.2 million barrels per day from October 2024 through September 2025 which some players fear will tip the market into surplus. OPEC+ did note that the flow can be halted if market conditions are impacted negatively though concerns over adherence levels from producers are offsetting this reassurance. Softer US Econ DataAlong with the OPEC+ outcome, weaker-than-forecast US ISM manufacturing data yesterday has also hit crude sentiment. Traders are fearing a drop off in US economic levels in line with recent data. Softer growth data, weaker jobs and now cooling factory data, have combined to depress oil sentiment near-term, despite the start of the summer driving season which typically sees a spike in demand for fuel. US Jobs NextLooking ahead this week, traders will be looking at Friday’s US jobs data. If we see any fresh weakness in these readings, this will no doubt feed into the current bearish mood among oil traders, sending crude further lower near-term. Technical Views CrudeThe sell off in crude has seen the market breaking sharply below the 77.64 level. Price is now testing the 72.61 level support with the bear channel lows coming in around here also. In line with bearish momentum studies readings, if we break lower here, 67.81 will be the next key support to watch.   More By This Author:Euro Dollar Commentary – Monday, June 3Crude Oil Commentary – Monday, June 3Nasdaq 100 Commentary – Friday, May 31