The price of USOIL has been stuck in a tight range since May and could see volatility soon.
USOIL: Daily Chart
USOIL currently trades at $69.75 after support at $64, while the resistance ahead is at $75 and $83.
Oil prices have slumped from a 2022 surge during the Russian conflict and have been unable to recover.
“The events in Russia led the market to consider how much Russian oil production and exports could have been affected if Wagner took more territory or if Russia fell into a civil war,” Andy Lipow, from Lipow Oil, told Yahoo Finance.
“A contrarian view is that this is bearish for the oil markets because Putin will try to export every bit of Russian oil he can sell in order to raise money to pay off his supporters and keep the army on his side,” added the analyst.
The OPEC group has kept oil production steady in June as it attempts to put a floor under the flagging price. The group pumped an average of 28.5 million barrels a day in June, which was an increase of 80,000 barrels a day from May, according to Bloomberg. A second month of production cuts was meant to add support to the price of oil, but the bears remain in charge.
The market has been positioned for a rally this year, but it has not materialised. Oil prices will slump 12% in 2023 due to the slower recovery in China.
The continued decline in oil prices could lead to stiffer action from OPEC in the coming months. The group previously said that $80 per barrel was a line in the sand and could extend production cuts for a short-term rally.
Saudi Arabia said in a statement Monday that further extensions are possible, and Energy Minister Prince Abdulaziz bin Salman promised to keep traders in “suspense”. The group is likely to meet again in August, ahead of the next formal meeting in November.
