Saudi Arabia’s official said that the oil cartel possibly will review the production freezing at the semi-annual meeting in June. The main consultant of the Saudi Arabia oil ministry, Ibrahim Muhanna, said the chance of cooperation is still opened and the plan of production freezing will be on the table again in the OPEC semi-annual meeting.
The plan of production freezing was discussed among the OPEC and Non-OPEC oil producers last Sunday, but came out without any deal. The oil producers keep pumping up their output with Russia and Saudi Arabia, two largest oil producers, plan to increase their production.
OPEC General Secretary, Abdullah Salim al-Badri, said OPEC is still the price driver in oil market. Oil market is burdened by oversupply problem and will find equilibrium next year, according to al-Badri.
In the meantime, oil price remains in uptrend as International Energy Agency (IEA) said that production level of OPEC members will decline in 2016, and it would be a biggest decline in one generation, according to IEA. It should help the market to find a new equilibrium.
Technically, the oil price is in correction phase, approaching the 50% Fibonacci support at 42.87. At the same time, hourly stochastic and CCI are oversold. Watch for bullish signal confirmation when the price is testing the Fib’ support at 42.87 as signal to go long with 43.71 as target and 44.45 in extension.
Be careful if the price managed to break the support at 42.87 because it will turn the intraday bias to bearish and possibly will be followed by a bearish move to 41.96-41.28.