WTI crude oil pares OPEC+ led gains above $79.00 amid sluggish markets

• WTI crude oil retreats from nine-week high as energy markets stabilize after week-start jump.
• OPEC+ shocks Oil traders with a surprise output, US National Security Council criticizes the move.
• Downbeat Fed bets, mixed US data also challenge Oil price to pare the biggest daily gains in a year.
• US PMIs, jobs report will be crucial for clear directions.

WTI crude oil buyers take a breather, following the biggest jump since March 2022, as traders reassess the OPEC+ led moves ahead of the key US PMIs and jobs report during early Monday. With this, the black gold prints nearly 4.85% intraday gains around $79.40 by the press time.

It’s worth noting that downbeat prints of manufacturing numbers from China and Japan join the recently firmer US Dollar to challenge the WTI crude oil buyers. On the same line could be US President Joe Biden’s readiness for further release of Oil from the Strategic Petroleum Reserve (SPR) to tame the energy price run-up.

That said, the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, known as OPEC+, announced a 1.16 million barrels per day of an output cut. The same renews inflation fears and allows the yields to pare recent losses.

On the same line could be the downbeat China Caixin Manufacturing PMI and Japan’s Tankan Large Manufacturing Index for the first quarter (Q1) of 2023, a closely observed output guide by the Bank of Japan (BoJ), which eased to 1.0 from 7.0 previous readings and 3.0 expected.

It should be observed that the fears of warmer weather in the West and fears of some more rate hikes from the top-tier central banks before they welcome the doves seem to also exert downside pressure on the WTI crude oil prices.

Looking forward, multiple top-tier central bank events and inflation numbers are up for publishing and can join Friday’s US jobs report to entertain Oil traders.

Technical analysis

A clear upside break of the 10-week-old descending resistance line surrounding $80.00, as well as a downward-sloping trend line from early November near $78.30,  become necessary for the WTI crude oil buyers to keep the reins.