WTI strongest since July 2015 on global output cut deal

Oil futures on NYMEX witnessed a bullish opening gap on Monday, starting a new week with a bang after oil traders cheered the joint oil output cut deal reached between the OPEC and non-OPEC producers for the first time since 2001.

Oil: Attention turns to OPEC, non-OPEC meeting

Currently WTI advances +5.17% to $ 54.16, reverting towards fresh seventeen-month highs of 54.50 reached earlier today. Oil prices keep the ongoing rally intact and consolidate the upside as markets assess the implications of the deal signed after years of disagreements and arguments between the OPEC and non-OPEC producers.

Analysts at Goldman Sachs noted, “We believe that the observation of the OPEC-11 and non-OPEC 11 production cuts is required to sustainably support... oil prices to our 1H17 WTI price forecast of $55 a barrel"

"This forecast reflects an effective 1.0 million barrels per day (bpd) cut vs. the 1.6 million bpd announced cut and greater compliance to the announced cuts is therefore an upside risk to our forecasts."

OPEC planned an output cut by 1.2 million bpd from Jan. 1, with the non-OPEC producers now agreeing to reduce output by 558k bpd, slightly short of 600k bpd expectations.

Next of note for the black gold remains the FOMC meeting due later this week, which is expected to have major impact on the US dollar, eventually impacting the USD-denominated oil.

WTI technical levels

A break above $55 (key barrier) could yield a test of daily R2 of $55.58. On the lower side, breach of support at $53.67 (daily pivot) would expose the daily low of $52.59.”