USOIL Upbeat After Monday’s Rally Fueled by the OPEC+ Cuts
USOIL Analysis
In a surprise move on Sunday, a series of oil producing countries announced production cuts on Sunday, to begin in May and last until the end of the year. These latest reductions amount to more than 1 million barrels/say combined. [1]
Russia had already slashed its output by 500,000, while OPEC and participating countries (OPEC+) had already agreed on a production cut plan of 2 million barrels/day back in October. All of that, add up to a planned reduction in output in excess of 3.6 million barrels/day.
Reacting to the announcement, the International Energy Agency (IEA) noted that oil markets were already "set to tighten" in the back half of the year and the OPEC+ decision risks "exacerbating those strains and pushing up oil prices". [2]
USOil comes from a two-week rebound from its mid-March slump. Sunday's move by OPEC+, send it to a 6% rally yesterday, extending the advance. Prospects of tighter supply due to the cuts and China's reopening are a tailwind.
The commodity is now close to new year highs (82.64), which will put 90.36 in its crosshairs, but it may prove elusive in the near term. On the other hand, the Relative Strength Index (RSI) is at the most overbought levels since October and a slide back to the EMA200 (mid-74.00s) would be reasonable base on that. Daily closes below it would shift immediate bias to the downside, but we sustained weakness much lower does not look easy under the new conditions.
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 04 Apr 2023 https://www.opec.org/opec_web/en/press_room/7120.htm | |
| Retrieved 18 Apr 2026 https://www.iea.org/news/statement-on-oil-markets |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.