Crude oil dropped on stronger dollar and weak data from China raised demand fears

Crude oil yesterday settled down by -1.15% at 5690 on a stronger U.S. dollar and as weak data from top oil importer China raised demand fears. The following table shows crude output by the Organization of the Petroleum Exporting Countries (OPEC) in millions of barrels per day (bpd) in May and April, according to a survey. OPEC and allies, known as OPEC+, agreed to cut their output target by 2 million barrels per day from last November through 2023. As part of this, the 10 OPEC members bound by the deal had a target to produce 25.416 million bpd.

According to the survey, the OPEC members required to limit output pumped 23.53 million bpd in May, down 540,000 bpd from April. Total OPEC output fell by 460,000 bpd. Market players are preparing for the upcoming June 4 meeting of OPEC+ - the Organization of the Petroleum Exporting Countries and allies including Russia. Mixed signals by major OPEC+ producers on whether or not the group will decide to further cut oil production have sparked recent volatility in oil prices. Despite the latest pullback in prices, banks HSBC and Goldman Sachs (NYSE: GS ) and analysts do not expect OPEC+ to announce further cuts in the upcoming meeting.

Technically market is under fresh selling as the market has witnessed a gain in open interest by 2.16% to settle at 17273 while prices are down -66 rupees, now Crude oil is getting support at 5579 and below the same and could see a test of 5467 levels, and resistance is now likely to be seen at 5791, a move above could see prices testing 5891.