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Oil prices rise in anticipation of the OPEC + negotiations

The oil market is growing in anticipation of the OPEC + video conference, which will touch upon the issue of limiting the level of oil production. Within the day, WTI has grown by more than 4%, Brent by 2%.

 

Market hopes for a successful completion of negotiations increased after Russia announced yesterday that it was ready to cut production by 1.6 million barrels per day. Experts note that OPEC + countries can agree on a total reduction in production by 10 million barrels per day.

 

Nevertheless, risks for the oil market remain high. An agreement to reduce OPEC + production may not be enough to normalize oil prices, since production decrease of 10 million barrels will not be enough to level the decline in demand. Many experts estimate that energy demand has fallen by almost 30 million barrels per day in recent months.

 

Negotiations between OPEC + countries may be hindered by the United States' reluctance to accede to this agreement. Earlier in Moscow and Eriyad, they stated that the success of the negotiations would depend on the accession of the United States and other countries outside the OPEC + group to this agreement. The White House counters this with statements that US production is declining without additional government restrictions.

 

Regarding the chart, we note the increased pressure of buyers at the level of 30.30. With a high probability today we can expect a breakdown of this mark and growth of quotations in the direction of the level of 33.75.

 

  • Resistance levels: 30.30, 33.75, 35.70.

 

  • Support levels: 26.90, 25.75, 23.20.

 

The main scenario - consolidation above the level of 30.30 and an increase towards 33.75.

 

An alternative scenario - a false breakdown of the level of 30.30 and a decline towards 25.75.

 

The fundamental outlook is moderately positive. We recommend abstaining from trading the instrument today.

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