OPEC+'s production constraints are continuing to keep barrel costs bolstered, though further action could be required from the oil conglomerate if further upside is to be seen as prices face a bit of a pressure after being denied by the $53 level. On the other hand, US oil drillers are reducing their rig counts, further helping to keep prices aloft after US oil producers shuttered four rigs in the week to January 11th, and the total US rig count now stands at 873. However, TS Lombardi noted that “flagging oil demand on slowing global growth could see oil prices stabilize for the time being as the scope for upside moves remains limited”.
After hitting a high of $53.29, Crude prices faced a strong resistance and retreated towards the $51 level as it also could not support efficiently the downfall. The price is currently hovering just below the $51 level with a bearish momentum. However, as long as the 50 level is not violated to the downside, our view and target of $53.89 per barrel is still the same on the medium term.
Support: 49.49 / 48.28
Resistance: 50.29 / 51.83