According to Motilal Oswal, Oil is currently bullish, and can go to levels of $43-45 but later markets can expect a slight pullback as there will be profit taking and seller pressure at this level to retest 36 level.
Motilal Oswal's report on Energy Weekly
Oil prices continue to surge for yet another week with Brent prices hitting a important physiological level of $40 last week, as the OPEC+ extended the output cut for one month and demand slowly recovered and supply has been reduced significantly. However, prompting several US shale operators to scale back their production curtailment plans, while Mexico is now free to resume its efforts to boost output. OPEC+ on June 6 approved a one-month rollover of their now 9.6 million b/d production cut accord, brushing aside Mexico's defection from the pact and receiving pledges of improved compliance from Iraq, Nigeria, Angola and Kazakhstan. The cuts originally 9.7 million b/d including Mexico had been scheduled to taper to 7.7 million b/d in July through the rest of the year.
Outlook
Oil is currently bullish, and can go to levels of $43-45 but later markets can expect a slight pullback as there will be profit taking and seller pressure at this level to retest 36 level. A monitoring committee led by OPEC+ kingpins Saudi Arabia and Russia will meet June 18 and monthly thereafter through the end of the year to stay abreast of market developments and recommend any adjustments to the deal.
For all commodities report, click here
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