CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open Account
✖

Crude oil on shaky ground as OPEC led deal remains at risk

Article By: ,  Financial Analyst
March 27, 2017 2:10 PM
  • US crude oil, as represented by the West Texas Intermediate benchmark, fell on Monday to retest the key $47-area support level. This major technical support marks the year-to-date lows, which have already been tested twice within the past two weeks.
  • Pressure on oil prices during the month of March has been exacerbated primarily by two key factors – 1) concerns that US production is quickly expanding and 2) questions as to whether the current OPEC-led deal to cut production will be extended beyond its current end date in June.
  • Over the weekend, oil ministers from OPEC and non-OPEC nations that have participated in the deal agreed to consider an extension. However, the committee of oil ministers did not actually recommend an extension as they had previously.
  • While it should be likely that the OPEC-led deal will ultimately be extended, perhaps a more pressing question is how well deal participants will continue to comply with the agreement, particularly non-OPEC countries like Russia.
  • Adding onto crude oil supply concerns amid increasing US production and the questionable future of the output deal, the International Energy Agency recently asserted that oil demand is expected to drop from 1.6M barrels a day last year to 1.4M in 2017.
  • Overall, current fundamental conditions continue to place pressure on crude oil prices, as few catalysts presently exist to cause any appreciable recovery.
  • From a technical perspective, US crude oil has been in a pressured consolidation for the past two weeks after having plunged from the $50’s earlier in the month. As noted, Monday saw an early drop to retest the $47-area support lows, forming what now appears as a tentative triple bottom pattern. Although such patterns sometimes point to a price-bottoming, current fundamental pressures continue to weigh on crude oil prices. With any continued pressure, a breakdown below $47 support could target the next major downside objective at the key $45 support level.

StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.


This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.


CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd. This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.

© FOREX.COM 2025