Key Points:
- CL-OIL up 0.4%, trading at $68.32 per barrel
- U.S. sanctions on Iran raise supply concern as OPEC+ announces additional output cuts until June 2026
- WTI on track for 2% weekly gain, its largest in 2025
CL-OIL (WTI Crude) Rises Amid Geopolitical Tensions and OPEC+ Output Cuts
CL-OIL (WTI Crude) prices edged higher on Friday, buoyed by growing concerns over global supply due to fresh sanctions on Iran and new OPEC+ output cuts.
U.S. Sanctions on Iran Drive Supply Concerns
The recent announcement of new U.S. sanctions targeting Iranian crude oil suppliers, including Chinese entities, added a layer of uncertainty to the market. While the physical impact of the sanctions might be minimal, the geopolitical risk premium is likely to remain a key driver for oil prices.
The sanctions, marking Washington’s fourth round of measures since February’s promise to reduce Iran’s oil exports to zero, have prompted speculation about tighter supply, especially in light of already reduced Iranian exports.
OPEC+ Plan to Cut Output Further
OPEC+ also played a significant role in supporting prices, with the group unveiling a plan for additional output cuts aimed at compensating for overproduction by some of its members. The new plan will see between 189,000 to 435,000 barrels per day cut monthly until June 2026.
While the plan aims to help balance the market, past trends suggest that not all members may adhere to the output targets, leaving some uncertainty around its effectiveness.
Technical Outlook and Market Sentiment
Picture: CL-OIL tests resistance at $68.64 after a sharp rally from $66.51, as seen on the VT Markets app.
CL-OIL (WTI Crude) increased by 0.4%, closing at $68.32 after opening at $68.17. The session saw a sharp rise, reaching a high of $68.64 before retracing slightly to close near $68.30.
The moving averages (MA 5,10,30) indicate bullish momentum, with short-term MAs crossing above the longer-term moving averages. This crossover suggests a continuation of upward price movement. The MACD (12,26,9) shows a shift to a more neutral stance, with the histogram narrowing, indicating that the bullish momentum may be losing strength as the MACD line (blue) begins to approach the signal line (yellow).
CL-OIL continues to see strong upward momentum. Key levels to monitor include $68.64 as immediate resistance and $66.51 as key support. A break above resistance may signal further upside momentum, while a drop below support could point to a bearish reversal, with potential downward pressure in the short term.
The market remains sensitive to supply disruptions, geopolitical tensions, and OPEC+ decisions. Traders should be aware that any escalation in tensions or unexpected changes in production could push prices higher. However, any failures by OPEC+ members to meet their production targets could lead to volatility in the market.
