Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Oil Price Outlook Hinges on OPEC JMMC Meeting amid Rise in US Supply

Oil Price Outlook Hinges on OPEC JMMC Meeting amid Rise in US Supply

David Song, Strategist

Oil Price Talking Points

The price of oil struggles to retain the rebound from the monthly low ($57.25) amid the blockade in the Suez Canal, but the OPEC Joint Ministerial Monitoring Committee (JMMC) meeting on March 31 may sway the near-term outlook for crude if the group takes additional steps to regulate the energy market.


Oil Price Outlook Hinges on OPEC JMMC Meeting amid Rise in US Supply

The price of oil has slipped below the 50-Day SMA ($59.10) for the first time since November as it snaps the upward trend carried over from last year, and crude may face a larger correction if OPEC and allies show a greater willingness to restore production in 2021.

It remains to be seen if OPEC+ will continue to regulate crude output as the voluntary production cuts by Saudi Arabia are set to expire in April, but the group of producers may remain reluctant to boost supply amid the ongoing rise in US stockpiles.

Image of DailyFX economic calendar for US

US crude inventories increased for the fifth consecutive week, with the update from the Energy Information Administration (EIA) showing a 1912K rise in the week ending March 19 versus projections for a 0.272M contraction.

Image of EIA Weekly US Field Production of Crude Oil

At the same time, weekly field production of oil climbed to 11,000K during the same period after printing at 10,900K for two consecutive weeks, and signs of subdued demand along with the gradual recovery in US output may put pressure on OPEC+ to regulate production throughout 2021 in an effort to keep crude prices afloat.

With that said, the decline from the yearly high ($65.98) may turn out to be a correction in the bullish trend rather than a chance in behavior if OPEC and its allies continue to regulate the energy market, but the price of oil remains at risk of facing a further decline as long as the Relative Strength Index (RSI) tracks the downward trend carried over from the previous month.

Oil Price Daily Chart

Image of Oil price daily chart

Source: Trading View

  • Keep in mind, crude broke out of the range bound price action from the third quarter of 2020 following the failed attempt to close below the Fibonacci overlap around $34.80 (61.8% expansion) to $35.90 (50% retracement), with the price of oil taking out the 2019 high ($66.60)as both the 50-Day SMA ($59.10) and 200-Day SMA($46.30) still reflect a positive slope.
  • However, the price of oil has slipped below the 50-Day SMA ($59.10) as it snapped the upward trend from November, with the Relative Strength Index (RSI) indicating a further correction in crude as it tracks the downward trend established earlier this year.
  • The price of oil appears to be stuck in a narrow range following the failed attempt test the Fibonacci overlap around $56.00 (23.6% expansion) to $56.70 (61.8% expansion), but need a move back above the $61.80 (50% expansion) region to bring the topside targets on the radar.
  • At the same time, a break/close below the Fibonacci overlap around $56.00 (23.6% expansion) to $56.70 (61.8% expansion) may push the price of oil towards the $52.20 (50% expansion) to $53.30 (38.2% expansion) region, with the next area of interest coming in around $49.20 (50% expansion).
Traits of Successful Traders
Traits of Successful Traders
Recommended by David Song
Traits of Successful Traders
Get My Guide

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.