WTI Oil Is Stuck Near The 50 EMA As Traders Wait For U.S. Response To OPEC+ Production Cuts

Key Insights

• WTI oil is mostly flat ahead of the weekend. 
• U.S. will likely try to put pressure on oil prices in the upcoming weeks. 
• If WTI oil stays above the 50 EMA, it will head towards the resistance at $90.30.

WTI Oil Is Trading Near Weekly Highs

WTI oil continues its attempts to settle above the 50 EMA at $88.50 as OPEC+ production cuts provide material support to oil markets.

The U.S. administration is unhappy with the OPEC+ decision, and talks about using the No Oil Producing and Exporting Cartels (NOPEC) bill have intensified. Several years ago, Saudi Arabia warned that it may stop selling oil in dollars if NOPEC is used by the U.S.

The U.S. may boost sales of oil from the strategic reserves, but such measures could backfire as traders may focus on falling reserves.

The price cap on Russian oil will also serve as a catalyst for oil markets, although traders will have to wait until December to see how it will be implemented.

At this point, the key threat to the oil market is the potential global recession. The recent economic data pointed to the slowdown of the world economy, which will put pressure on demand for oil. If traders focus on recession risks, oil prices will decline despite OPEC+ production cuts.

WTI Oil Tries To Settle Above The 50 EMA

Currently, WTI oil is trading near the key resistance level at the 50 EMA. If WTI oil manages to settle above this level, it will head towards the next resistance at $90.30. A successful test of this level will push WTI oil towards the resistance at $92. In case WTI oil climbs above $92, it will head towards the next resistance level, which is located at $94.

On the support side, a move below the 50 EMA will open the way to the test of the support at $86.20. If WTI oil settles below this level, it will head towards the next support at the 20 EMA at $85. A successful test of the support at the 20 EMA will push WTI oil towards the next support level at $83.50.

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