For December, OPEC+ said it would continue to reduce oil production by 2.2 million barrels daily. Lower oil prices, along with decreased demand, caused them to postpone production growth from October, and this trend appears to be continuing.
OPEC's Thoughts on Oil Production
Saudi Arabia and OPEC have repeatedly stated that they base their decisions on market principles and the goal of maintaining supply and demand rather than setting a price target. Data and rumors, however, indicate that an increased oil price benefits OPEC nations more because it increases their profit margins. OPEC nations occasionally suffer from low oil prices because the associated expenses increase.
Haitham Al Ghais, the general secretary of OPEC, stated on Monday that the organization has a very optimistic outlook for the short- and long-term oil demand. It's noteworthy that this follows OPEC's current forecasts, which have somewhat decreased. Al Ghais continued by saying that while the organization and markets generally face many difficulties, not all bear negative effects. According to Al Ghais, the US economic system's strength is another advantage, and China's 5% growth is not bad.
Event To Look At
Regarding oil prices, this week may be extremely erratic. In addition to the information releases, there are also Central Bank conferences, US elections, and, obviously, the possibility of an Iranian strike on Israel. Additionally, Donald Trump's win has provided a chance to increase the oil price because there are still rumors that Trump might approve a strike on Iran's nuclear facilities.
Moreover, the Crude Oil inventories could come at 2.10 million barrels, which signals a higher number of inventory.
The FOMC meeting and the rate decision would be another event to look at, where the current forecast is a rate cut by 25 bps to 4.75%
Brent Crude Oil Price Technical Analysis
In the daily chart of Brent Crude Oil prices, a consolidation is visible in the latest price zone, where a strong bullish reversal is possible. Although the 200 day SMA is above the current price, the price is hovering above the 50 day EMA, forming a double to liquidity.
In the volume structure, the buying pressure is possible as the latest daily candle showed a bullish rejection from this line.
Considering the current market momentum, investors should monitor how the Brent Crude price trades at the 76.12 resistance level. The primary aim is to wait for a bullish break with a daily close above this line, which might extend the bullish pressure at the 200 day SMA line. However, the bullish market reversal might be possible after overcoming the 200 SMA line.
On the bearish side, any immediate selling pressure below the 73.74 high volume line might be a short opportunity, targeting the 69.90 support level.
