Oil price outlook: crude oil rebounds into resistance amid opec+ report

Crude oil has clawed back recent losses over the last three trading sessions. Oil price action now trades about 10% higher this week, but the commodity is still lower on a month-to-date basis. A recovery in market sentiment, indicated by stagnating selling pressure across major stock indices, likely helped provide buoyancy to crude oil.

Speculation headed into the latest OPEC+ update may have boosted petroleum prices as well. Top energy ministers comprising the JMMC gathered to discuss latest oil market outlook and review production quota compliance. Crude oil was jawboned higher with commentary stating ‘further necessary measures may be needed’ in light of slumping demand as the global economic recovery stalls.

Remarks from Saudi Prince Abdulaziz, who said “I will make this market jumpy,” might have scared oil shorts with weak hands as the energy minister doubled down on his remarks with additional expletives. Further, the JMCC suggested to OPEC officials that the compensation period for overproduction be extended through year-end, which could encourage more conformity among the oil cartel and facilitate market stability.

Crude oil could struggle to extend its rebound, however, as the commodity clashes with a critical zone of technical resistance around the $41.00-price level. This area of confluence is highlighted by the 61.% Fibonacci retracement of last month‘s high to this month’s low. Also, the relative strength index is perched on the edge of ‘overbought’ territory.