Brent Recovers To $80 As OPEC Reminds Market Plan Not Fixed

Oil prices continued their recovery following OPEC’s announcement to reduce output cuts from October and don’t seem to be pressured by US crude and product inventory builds. The market has found support from the reminder that OPEC can change its plan and oversold signals have induced buying. Prices rose around 2% on Thursday to be down around 1.5% since the decision. The USD index was slightly higher on the day.

• WTI rose 2.2% to $75.67/bbl after a low of $74.06 and is 1.3% lower this week. It has started today around $75.63. The benchmark is still below initial resistance at $76.15, May 24 low. Technicals signal the continuation of the bearish theme. Initial support is at $72.48.
• Brent has hit $80 again rising 2.1% to close at $80.02/bbl and is now down 1.7% this week. It fell to a low of $78.38 before rallying to a high of $80.08 and approaching resistance at $80.44, May 24 low. Initial support is at $76.76, June 4 low.
• The Saudi energy minister reminded the market that it can leave current production levels unchanged if it feels that increasing them could result in excess supply. The decision to reduce the “voluntary” cuts is not set in stone and can be changed.
• Russia’s deputy PM said that his country will cut output to neutralise its recent overproduction.