USOIL Cautious Ahead of OPEC+ Meeting
USOIL Analysis
OPEC, Russia and other allies known as OPEC+, have implemented additional voluntary cuts of around 2.2 million barrels per day (mbpd) this year, which are due to expire at the end the second quarter. The group is anticipated to decide the future of these reductions during its meeting on Sunday June 2, with baseline expectations being for a rollover. These events tend to have a level of uncertainty, which is aggravated this time by increased tension over offer capacity and compliance, creating scope for market volatility.
The aforementioned curbs are on top of another 3.66 mbd reduction scheme in place until the end of the year and the two combined, account for roughly 6% of global production. OPEC+ has implemented those curbs to supported oil prices but they may not be comfortable with much higher prices. This could risk demand destruction, with the International Energy Agency (IEA) already projecting a significant slowdown in 2024 consumption growth. [1]
After a strong first quarter, USOil runs its second losing month, amidst the Fed's reluctance to cut rates, spare capacity and the lack of substantial disruptions from the Middle East hostilities. Below the EMA200 bias is on the downside and USOIL vulnerable to 71.38, but sustained weakness does not look easy under current conditions.
On the other hand, OPEC+ production cuts are helpful for USOil, geopolitical tensions sustain risk for traffic restrictions and there are prospects for fairly balanced markets in the second half. As such, oil prices can rebound above the EMA200 (at around 80.00), but tackling the 2024 highs (87.66) has a higher degree of difficulty.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 17 Apr 2026 https://www.iea.org/reports/oil-market-report-may-2024 |
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