Crude Oil Cheapening in Response To OPEC+ Decision
Dmitriy Gurkovskiy | Jul 19, 2021 12:18
Early in the new week of July, Brent is falling as investors are getting rid of emotions in prices after learning the facts.
Last weekend, OPEC+ had an important meeting, which, for once in a while, ended successfully and effectively. So, starting August 2021, all members of the agreement will be allowed to increase their output by a total of 0.4 million barrels per day on a monthly basis until phasing out the 5.8 million barrels per day production adjustment.
At the same time, the cartel also managed to settle the conflict of interests between the UAE and Saudi Arabia. UAE’s daily output will now be 3.5 million bpd, which is a little bit less than its initial target of 3.8 million.
In addition to that, it was decided that starting May 2022 the baseline for the calculations of the production for some members of the cartel will increase. Each month, OPEC+ and its allied countries will negotiate, while in December they will discuss the market situation and their further moves.
In the H4 chart, Brent continues the correctional wave. Today, the asset may reach 70.56. After completing the correction, the instrument may resume trading within the uptrend with the target at 77.00. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is still moving below 0, thus indicating the correctional wave on the price chart.
As we can see in the H1 chart, the situation is pretty similar. Brent continues correcting downwards and may soon reach 70.56. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: its signal line is still moving towards 25, thus indicating that the correction continues.
By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Disclaimer
Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
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