The Cartel Controls the Market: More Oil Ahead

#XTIUSD

Key zone: 61.50 - 63.50

Buy: 63.50 (on strong positive fundamentals); target 65.50-66.50; StopLoss 62.80

Sell: 61.50 (after a retest of 62.50); target 60.00-59.50; StopLoss 62.20

OPEC+ continues to maintain balance: it decided to raise its production targets by 137K barrels per day, reflecting ahead-of-schedule progress on the 1.65M bpd output cut announced earlier this year. Recall that the alliance had already lifted targets by 2.5M bpd between April and September.

According to official comments, the adjustment is explained by steady demand and moderate supply shortages: reserves in major economies remain at multi-year lows, while fuel consumption in Asia and the Middle East continues to rise.

A schedule of compensation cuts has also been published for countries that previously exceeded their quotas. The document runs until June 2026 and provides for monthly restrictions in the range of 190K–829K bpd.

The main burden falls on Kazakhstan, which systematically produces above limits, though it accepts penalty sanctions. Of all OPEC+ participants, only Saudi Arabia and Algeria strictly adhered to their quotas.

For exporters, the decision looks like a compromise, allowing them to preserve the balance between revenues from high prices and the need to satisfy growing demand.

Although investors viewed the alliance’s decision negatively (as a signal of an escalating fight for market share), a sharp price collapse is unlikely. The most probable scenario for Brent and WTI is a broad sideways range of $65–70 per barrel, where additional supply is offset by strong demand.

Key risks remain geopolitical. Russia carried out its largest air strike since the start of the war in Ukraine, raising the likelihood of new U.S. sanctions on Russian energy exports — a step that could reduce supplies and support prices. Conflicts with other suppliers, such as Venezuela, may also add to risk premiums.

Both benchmarks started the week with corrections, but no one dares to call it the start of a new trend, especially as technical indicators still point downward.

WTI is consolidating between $63.00–63.50. A breakout above $63.50 would open the way to $66–67.50. Immediate support is at $62.00, with stronger demand likely near $60.50.

So we act wisely and avoid unnecessary risks.

Profits to y’all!