​WTI Extends Upsides on Slowed Production Growth of OPEC+

WikiFX News (4 Dec.) - OPEC+ on Thursday agreed to slightly boost global oil output in January so as to slow down oil production growth. The decision lifted market sentiment, pushing WTI to nearly $46.0.

OPEC+ agreed to slightly ease their deep oil output cuts by 500,000 bpd from January 2020, down from the 1.9 million bpd that set previously. However, it failed to delay the production hike for an expected 3-6 months.

OPEC+ also agreed to hold monthly ministerial meetings starting January 2021 to assess market conditions and decide on further production adjustments for the following month. Markets are happy to see OPEC+ continuing to make timely changes and slowing down the oil production growth, which boosted WTI.

Besides, since House Speaker Pelosi and Senate Majority Leader Mitch McConnell has pledged to push forward the coronavirus aid program as soon as possible, the risk appetite lifted thereby will bode well for oil prices.

The following chart shows that oil prices have established a firmer footing in the $43.30-$44.0 area and rebounded to an eight-and-a-half-month high of $46.24. Given the stable uptrend, oil could rally to $46.0 or even challenge the $49.0-$50.0 area.

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Chart: Trend of Oil Prices