Despite recent increases in US stockpiles, West Texas Intermediate (WTI) crude oil maintained its upward rally and hitting close to a fresh five-month high at $83.11 per barrel.

However, this upward trend has been driven by several factors including the ongoing production cuts by major oil-producing nations, including Russia, Saudi Arabia, and other members of the Organization of the Petroleum Exporting Countries (OPEC).

It should be noted that Russia announced in March that it would deepen its production cuts, further tightening global supply. Hence, the ongoing production cuts by major oil-producing nations, including Russia and Saudi Arabia, are putting upward pressure on crude oil prices.

Furthermore, the long-lasting geopolitical tensions the Middle East have raised concerns about potential disruptions to oil supply, which put positive pressure on US oil price. However, the ongoing Israel-Hamas conflict and attacks on ships in the Red Sea by Houthi rebels have contributed to these worries, supporting higher oil prices. Moreover, the US Energy Department is buying oil at current prices to replenish its strategic reserves. This shows strong oil demand, which push prices higher.

Bets on Lower Russian Output Ease Global Supply Concerns

It is worth noting that Russia’s plan to reduce oil output alleviates concerns of oversupply, putting positive pressure on US oil prices due to improved market balance and stability. Russia, along with Saudi Arabia and other OPEC members, agreeing to continue limiting their oil production has made people feel more confident about the oil market.

Therefore, the agreement between Russia, Saudi Arabia, and OPEC members to reduce oil output has boosted market confidence, mitigating fears of oversupply and supporting upward trends in US crude oil prices.

Anticipated Impact of OPEC Meeting on Oil Prices

Apart from this, investors are keeping an eye on an upcoming OPEC meeting. However, the anticipation surrounding the upcoming OPEC meeting and the commitment of members to production limits could exert positive pressure on US oil prices. If Saudi Arabia continues its production cuts and OPEC members adhere to their promises, market confidence may strengthen, leading to higher oil prices. However, any indication of members exceeding production limits could undermine this confidence and lower prices.

Hence, the OPEC meeting is crucial for investors as it can affect market confidence and US oil prices, depending on member adherence to production limits.

Impact of Stranded Oil Tankers near Venezuela on US Oil Prices

On the other hand, recent reports reveal that many oil tankers are stuck near Venezuela’s coast, creating more complications in the market. This disruption in the supply chain could lead to reduced availability of crude oil, potentially driving prices higher as demand outweighs supply. Additionally, if the situation persists or escalates, it may further exacerbate concerns about global oil supply stability.

Therefore, the situation of oil tankers stuck near Venezuela’s coast could decrease crude oil availability, driving prices higher due to supply shortages and concerns about global supply stability.

Crude Oil (USOIL) Price Forecast

The WTI Crude Oil market presents a bullish technical outlook as it hovers at $83.06. The 4-hour chart reveals a pivot point at $83.16, with the price currently positioned just below this level. Immediate resistance for oil is at $83.78, with subsequent levels at $84.64 and $85.45. These figures represent critical thresholds that may restrain further price increases.

Support, on the other hand, stands firm at $82.46, with additional support levels at $81.47 and $80.58, where buyers could potentially re-emerge. The 50-day Exponential Moving Average (EMA) at $81.36 bolsters the bullish trend, providing a baseline for current buying interest. Reinforcing this outlook, the Relative Strength Index (RSI) remains above the midline at 54.51, suggesting that the buying momentum is sustained.