WTI Slid Further Below $67 After Saudi May Rise Output
By: Eddy Peng May 28, 2018
The West Texas Intermediate (WTI) future slid further on Monday below $67 per barrel, which was the fifth day for price slump. The MSCI Asia Pacific Energy Index has the biggest decline following that a Saudi minister said petroleum supply would likely increase in the second half of the year.
In the context of achieving a key goal of eliminating the oil glut by OPEC and allied oil producers, the crude market has re-balanced after the excess in oil inventories had weighed on prices for three years. For now, the stockpiles in developed countries plunged in April to less than the five-year average, making oil-producing nations re-consider whether they should extend their oil cut deal.
Russia and the Saudis are proposing raising production to make up for losses from other members, notably a worsening slump in Venezuelan supply and a potential drop in Iran as renewed U.S. sanctions kick in. Those countries have nothing to gain from looser output caps, and plenty to lose if oil prices extend Friday’s steep decline.
On a daily chart, the intraday price for WTI broke out of a support placed by Jan. 25’s high, driving further losses in the late trading hours today. However, the Ichimoku Cloud may act as a tray to prevent further decline, pushing the price back to above 67; otherwise, a breakout of the cloud will likely trigger another drop in the near term, then will expose a resistance near 61.89.
Chart 1: WTICOUSD Daily
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