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Commodity Market: US Crude Oil hits a fresh 142-week high ahead of OPEC+ decision on output cuts

Futures on US West Texas Intermediate Crude Oil rose over 1% on Thursday after a drop in US crude oil stocks, while market players awaited a decision by the Organization of the Petroleum Exporting Countries and allies (OPEC+) on supply cuts during the second half of 2021.

Last year, OPEC+ members agreed to record production cuts of nearly 10 million barrels per day, starting from May 2020 and due to be discontinued by the end of April 2022.

Then, supply cuts were eased between May and July this year by 2.1 million barrels per day. The group is scheduled to hold a meeting later on Thursday to decide whether to raise production (probably by between 0.5 million and 1.0 million barrels per day) next month, or leave output without change.

According to Citi analysts, global oil market fundamentals could justify an output cut easing, as they forecast a 1 million barrels per day increase in OPEC supplies in August.

However, regardless of higher OPEC+ production, Citi analysts project a huge market deficit of over 3 million barrels per day through the third quarter.

The latest report by the US Energy Information Administration showed that crude oil stockpiles had dropped for a sixth consecutive week, as demand surged. Yet, news of fresh outbreaks of the Delta variant of the novel coronavirus raised certain concerns that demand recovery might be hampered.

As of 8:37 GMT on Thursday WTI Crude Oil Futures were gaining 1.14% to trade at $74.31 per barrel, after earlier touching an intraday high at $74.54 per barrel. The latter has been the black liquid’s strongest price level since October 10th 2018 ($75.08 per barrel). WTI Crude Oil Futures surged 10.78% in June, or the most since February.

At the same time, Brent Oil Futures were advancing 1.25% on the day to trade at $75.57 per barrel, after earlier touching an intraday high at $75.65 per barrel. The latter has been the commodity’s strongest price level since June 28th ($76.56 per barrel). Brent Oil Futures rose 7.49% in June, or the most since February.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $73.48
R1 – $74.13
R2 – $74.80
R3 – $75.45
R4 – $76.11

S1 – $72.81
S2 – $72.16
S3 – $71.49
S4 – $70.83

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $74.64
R1 – $75.32
R2 – $76.00
R3 – $76.68
R4 – $77.36

S1 – $73.96
S2 – $73.28
S3 – $72.60
S4 – $71.92

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