Oil sees upside blocked with OPEC non-compliant to its own production cuts

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<li><strong>WTI Oil staples near $75 with current events not enough to send Crude higher.</strong></li>
<li><strong>OPEC cuts are not sufficient and are just a drop on a hot plate.</strong></li>
<li><strong>The US Dollar Index fails again to hold ground above important technical indicators.</strong></li>
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<p>Oil prices are facing selling pressure again this Wednesday, despite the small uptick near $75 earlier, proving that the current Oil production cuts from OPEC+ are simply not enough. Especially when Russia, who would take the biggest share of  supply cuts, is not respecting them and continues to pump up even more Crude in order to fund its war in Ukraine. More issues ahead meanwhile with markets readjusting for a lost year in 2024 with sluggish economic growth and central banks not eager to let loose of the elevated rates regime anytime soon. </p>
<p>Meanwhile, the US Dollar Index (DXY) is having another downbeat day ahead of the <a href="https://www.fxstreet.com/macroeconomics/central-banks/ecb">European Central Bank</a> (ECB) meeting on Thursday. Markets are sending the US Dollar lower again with a risk-on tone present in the markets. Halfway through the European trading session, all European indices are up over 1%.</p>
<p>Crude Oil (WTI) trades at $74.58 per barrel, and Brent Oil trades at $79.27 per barrel at the time of writing. </p>
<h2><strong>Oil news and market movers: Markets reprice flood of oil</strong></h2>
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<li>Since the November OPEC decision to issue production cuts for further and longer, Crude prices have been unable to substantially move higher and stay there for longer. </li>
<li>Energy traders are signalling a lost year for 2024 with less profit as Red Sea issues are jacking up the costs to transport the black fuel across the globe.</li>
<li>The overnight American Petroleum Institute (API) print on Tuesday was a substantial drawdown of 6.674 million barrels and against a previous build of 0.483 million barrels. Expectations were a smaller drawdown of just 3 million barrels.</li>
<li>Later this Wednesday, near 15:30 GMT, the weekly stock pile print will be released from the Energy Information Administration (EIA). Previously it experienced a drawdown of 2.492 million barrels with another drawdown of 2.15 million barrels expected. </li>
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<h2><strong>Oil Technical Analysis: Issues at hand are not big enough</strong></h2>
<p>Oil prices are not having the hoped-for return OPEC, and especially Saudi Arabia, had projected. <a href="https://www.fxstreet.com/markets/commodities/energy/oil">Oil prices</a>, though near $75, are not going substantially higher. A failed result thus of an even bigger failed meeting back in November, with, in the meanwhile, two African members having left OPEC – leaving the organisation unable to turn the tide in order to keep prices profitable, even in a slowing down economy. </p>
<p>On the upside, $74 continues to act as a line in the sand after a failed break above it on Friday.  Although quite far off, $80 comes into the picture should tensions build further. Once $80 is broken, $84 is next on the topside. </p>
<p>Below $74, the $67 level could still come into play as the next support to trade at, as it aligns with a triple bottom from June. Should that triple bottom break, a new low could be close at $64.35 – the low of May and March 2023 – as the last line of defence. Although still quite far off, $57.45 is worth mentioning as the next level to keep an eye on if prices fall sharply. </p>
<p><a href="https://editorial.fxstreet.com/miscelaneous/WTI%20US%20OIL%20(8)-638416913339529496.png" target="_blank" rel="noopener"><img decoding="async" alt="US WTI Crude Oil: Daily Chart" src="https://editorial.fxstreet.com/miscelaneous/WTI%20US%20OIL%20(8)-638416913339529496.png" style="width: 637px; height: 320px;" /></a></p>
<p><small>US WTI Crude Oil: Daily Chart</small></p>
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<h2>WTI Oil FAQs</h2>
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<p>WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.</p>
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<p>Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.</p>
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<p>The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.</p>
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<p>OPEC (Organization of the Petroleum Exporting Countries) is a group of 13 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.</p>
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<br /><a href="https://www.fxstreet.com/news/oil-stuck-in-a-rut-with-opec-and-red-sea-not-enough-202401241145">Source link </a></p><p>The post <a href="https://forextraderhub.com/oil-sees-upside-blocked-with-opec-non-compliant-to-its-own-production-cuts.html">Oil sees upside blocked with OPEC non-compliant to its own production cuts</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>