Will Oil’s Rally Endure as OPEC Restores Supply Cuts?
FOREX.com Market Analyst Razan Hilal joins Fiona Cincotta to dissect the forces steering crude prices after WTI’s rebound above $60.
Key Takeaways
Oil traders are eyeing $55 support as the market’s pivotal floor
OPEC’s decision to unwind supply cuts and boost market share is pressuring prices in the near term
A break of $55 could expose the $49 channel base
WTI’s Bounce and the Golden-Ratio Floor
Hilal notes that the first-quarter slide found buyers at “the golden 0.618…$55 support”, derived from the 61.8 % Fibonacci retracement of the move from 2020’s sub-zero lows to the 2022 peak. Successive tests of that level—each time OPEC floated further supply increases or trade tensions flared—have so far produced rebounds, sending prices back above $60.
Trade Talks Meet OPEC Strategy
Host Fiona Cincotta highlights how “US-China trade talks” and OPEC supply moves dominate sentiment, with Hilal adding that “OPEC is willing to increase its market share despite these critical price lows”, suggesting the cartel is positioning for stronger demand once global activity normalizes. Near-term, though, the extra barrels keep upside in check.
What If $55 Breaks?
Despite the constructive long-term view, Hilal stresses the downside risk: “If we do manage to drop below that $55 mark, we might align with the $49 barrier”. That level matches the lower boundary of an ascending channel traced from the 1980s, offering the next major technical target should support give way.
Momentum and the Longer-Term Outlook
Weekly indicators are “bouncing from oversold momentum last seen in 2020”, a period that preceded a powerful multi-year rally. Hilal argues this similarity, alongside OPEC’s strategic stance, builds a case for eventual strength once “economic activity gets back on track”. Until then, she believe that traders will keep one eye on $60 resistance and the other firmly on $55.
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