Choose country & language:

Oil rises as OPEC fails to deliver promised output

Home >  Daily Market Digest >  Oil rises as OPEC fails to deliver promised output

Written by:
Myrsini Giannouli

26 January 2022
Share the article

On Monday, WTI price fell amid a global stock sell-off, plummeting to $82.4 per barrel, before climbing again to above $84.6 per barrel. WTI continued trading below the $85.7 per barrel resistance on Tuesday morning, but broke through the resistance later in the day. WTI price continued trading along its uptrend, although with more modest performance than last week’s 7-year high.

The tensions between Russia and Ukraine, as well as in the middle east, are creating a crisis in the energy sector. Diplomatic talks seek to avert a military confrontation between Russia and Ukraine, but with little results so far. The US has placed over 8,500 troops on alert, fearing a possible escalation of the crisis. 

Meanwhile, OPEC has failed to deliver the promised output, as some member countries, such as Nigeria and Iraq, cannot meet their goal output. OPEC has vowed to gradually restore output to pre-pandemic levels, increasing its output by 400,000 barrels per day. Oil production capacity remains an issue however and, as existing inventories are tight, a potential oil shortage may push the price of the commodity to three-digit figures within the year. 

The outlook for the commodity is bullish and it is currently testing the $85.7 per barrel resistance level. In case the trend is reversed, support may be found at the $77.8 per barrel level. Today, traders should keep an eye on geopolitical developments and also on the upcoming announcements of the US Federal Reserve. US Crude Oil Inventories are also scheduled to be released today and may cause some volatility in the price of oil.

WTI 1hr chart

TRADE WTI

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

Written by:
Myrsini Giannouli

Share the article:

Latest news

Euro gains strength as ECB moves in a more hawkish direction

Myrsini Giannouli 20 May 2022

Gold prices are on the rise as risk-aversion sentiment grows

Myrsini Giannouli 20 May 2022

Oil prices rebound as the end of the Shanghai lockdown insight

Myrsini Giannouli 20 May 2022

Cryptocurrency prices reflect stock market volatility

Myrsini Giannouli 20 May 2022

Why TopFX

10-years

10-years

industry presence
as a Liquidity Provider

Spreads

Spreads
from 0.0 pips

and reliable execution

Segregated

Segregated

client funds

First-class

First-class

customer support

Open your Live Account in 3 Steps

Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!