The current crude oil market is experiencing a crucial psychological test as it finds support at the $72.50 level. The decisions made by OPEC have been exerting a significant impact, resulting in an undecided market movement. Analyzing the 240 Minute chart, we observe that the price is currently hovering just below the 200 Day Moving Average (MA) and in between the 50 and 200 Day MA. This indicates a potential range between $72.97 and $71.46. Notably, the Point of Control also holds psychological importance, suggesting a possible price movement towards the support level at $71.46.
On June 3rd, 2023, OPEC and its allies, known as OPEC+, decided to maintain their current production level of 43.2 million barrels per day (bpd) for July and August 2023. This decision disappointed some market participants who were hoping for increased production to alleviate rising oil prices. OPEC+ is cautious about making significant changes to avoid disrupting the delicate global oil market. The decision is likely to keep oil prices elevated in the near term, but if demand weakens, OPEC+ may reconsider its production policy. Key factors influencing the decision include supply disruptions caused by the conflict in Ukraine, rising demand due to global economic recovery, concerns about fueling inflation, and pressure from members to maintain market share.
Despite the uncertain market conditions, the momentum indicator signals a upward trend bias with a important point to note that prices may be heading lower due to uncertainty in the Oil market. Considering the outlook for the week, we can identify three potential scenarios. Firstly, there is a possibility of the price breaking above the trend line at $75 and advancing towards the future resistance level at $75.90. Alternatively, the market could retest the $73.55 and $75 levels before reversing downwards towards the 50 Day MA area at $71.46 and $69.90. Lastly, the market might exhibit a ranging behavior, oscillating between the $76 level and the $69.90 level.