As Saudi Arabia and Russia have agreed to cut crude oil production by about 10 million barrels in an effort to shore up oil prices, the move seems to be an advent of more such moves while the bottoming oil futures have to cross important resistance levels.
I find that the WTI Crude Oil futures may face tough immediate resistance at the levels of $27, where the 20-Day Exponential Moving Average provides a major resistance to this move. Let’s wait and watch the resultant directional move of oil futures after the final outcome of the meeting between U.S. President Donald Trump and the heads of various large American energy companies on Friday.
I conclude that the breakout of COVID-19, which has resulted in a lockdown situation in most parts of the world, may continue to hamper fresh demand for oil products in the near future despite a plethora of efforts to fight this pandemic.
Secondly, the oil producers may find it difficult to continue with current production levels. They may continue to push oil futures upward from the bottom-level, which may only result in futile rallies for a long time.
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