Oil stuck in a rut with OPEC and Red Sea not enough

• WTI Oil staples near $75 with current events not enough to send Crude higher.
• OPEC cuts are not sufficient and are just a drop on a hot plate.
• The US Dollar Index fails again to hold ground above important technical indicators.

Oil prices are going nowhere, despite the small uptick near $75, proving that the current Oil production cuts from OPEC+ are simply not enough. Especially when Russia, who would take the biggest share of  supply cuts, is not respecting them and continues to pump up even more Crude in order to fund its war in Ukraine. 

Meanwhile, the US Dollar Index (DXY) is having another downbeat day ahead of the European Central Bank (ECB) meeting on Thursday. Markets are sending the US Dollar lower again with a risk-on tone present in the markets. Halfway through the European trading session, all European indices are up over 1%.

Crude Oil (WTI) trades at $74.48 per barrel, and Brent Oil trades at $79.22 per barrel at the time of writing. 

Oil news and market movers: What will it take?

• Since the November OPEC decision to issue production cuts for further and longer, Crude prices have been unable to substantially move higher and stay there for longer. 
• Energy traders are signalling a lost year for 2024 with less profit as Red Sea issues are jacking up the costs to transport the black fuel across the globe.
• The overnight American Petroleum Institute (API) print on Tuesday was a substantial drawdown of 6.674 million barrels and against a previous build of 0.483 million barrels. Expectations were a smaller drawdown of just 3 million barrels.
• Later this Wednesday, near 15:30 GMT, the weekly stock pile print will be released from the Energy Information Administration (EIA). Previously it experienced a drawdown of 2.492 million barrels with another drawdown of 2.15 million barrels expected. 

Oil Technical Analysis: OPEC unable to shore up prices

Oil prices are not having the hoped-for return OPEC, and especially Saudi Arabia, had projected. Oil prices, though near $75, are not going substantially higher. A failed result thus of an even bigger failed meeting back in November, with, in the meanwhile, two African members having left OPEC – leaving the organisation unable to turn the tide in order to keep prices profitable, even in a slowing down economy. 

On the upside, $74 continues to act as a line in the sand after a failed break above it on Friday.  Although quite far off, $80 comes into the picture should tensions build further. Once $80 is broken, $84 is next on the topside. 

Below $74, the $67 level could still come into play as the next support to trade at, as it aligns with a triple bottom from June. Should that triple bottom break, a new low could be close at $64.35 – the low of May and March 2023 – as the last line of defence. Although still quite far off, $57.45 is worth mentioning as the next level to keep an eye on if prices fall sharply. 

US WTI Crude Oil: Daily Chart