WTI oil drops on reduced possibility of OPEC action

By FXStreet FXStreet (Mumbai) – Oil prices extended the drop in the US session as the traders do not see the OPEC and non-OPEC members on the same page regarding production cut any time soon.

Drops below 5-DMA

Prices fell below 5-DMA at USD 32.60 and hit a session low of USD 32.11 levels before recovering slightly to trade around USD 32.40/barrel.

The technical recovery which began on Jan 20th gained momentum last week after OPEC and non-OPEC members took turns in expressing readiness to work in co-operation (cut production) to support prices. However, neither of them has officially come out with a specific date of the meeting.

Consequently, hopes of a joint production cut are dwindling, which is evident from the drop in the prices seen today.

WTI Technical Levels

The immediate resistance is seen at 32.72 (Jan 25 high), above which the gains could be extended to 33.62 (daily high), which if taken out shall open doors for a re-test of 34.81 (Jan 28 high). On the other hand, a break below 32.11 (daily low) could see prices slide to 31.20-31.30 (hourly 200-MA + 10-DMA).
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Source:: FX Street