Oil keeps lower for now, down 0.8% to $72.50
One can call it a delayed reaction to the OPEC+ compromise news, but I would argue this is more of a case of a technical exhaustion and buyers taking profits for now.
The UAE and Saudi Arabia reached a compromise yesterday, seeing price fall from $75.00 to $74.07 before a quick bounce back to $75.42. The price action in itself is telling and in my view, shows how market sentiment actually feels about the agreement.
Sure, Iraq is also said to be pushing for a higher baseline (with perhaps Kazakhstan to follow) but barring these minor hiccups, the oil outlook is still relatively solid.
Price has since fallen further to $72.50 currently but the recent uptrend is still very much intact, with support seen closer to the month’s lows @ $70.80-10.
In the context of the bigger picture, the test of the October 2018 highs has seen price stall a little but the latest retreat isn’t really putting much of a dent to the surge higher that we have seen so far on the year.