On Sunday, OPEC and its allies agreed to gradually add more oil supplies to the market from August (400,000 b/d monthly hikes until Sep 2022) after Saudi Arabia and the United Arab Emirates resolved a dispute that was blocking the deal.
Iraqi Oil Minister Ihsan Abdul Jabbar said on Sunday that the oil market has seen an improvement in demand and a decline in surplus and stockpiles, Reuters reported.
His statement followed the OPEC+ agreement to boost the oil supply from August.
“The meeting emphasized strengthening collective cooperation, praising the countries’ compliance with the agreement, and the positive development in increasing demand for crude, as well as the decline in stocks and oil surplus, which is a positive and influential indicator,” Abdul Jabbar said.
Oil technical analysis
While the news is arguably negative for oil, the technical structure of the market should also be noted.
The daily M-formation is a ‘meanwhile’ bullish formation, at least until the neckline (prior lows) that would be expected to act as a strong level of resistance.
If the price fails to break the resistance, then it would be expected to lead to an onward downside continuation in the coming week:
The targetted area is between the 67.50s and 65.30s.