Brent crude price reversal following OPEC+ decision
The group decided to reduce production by an additional one million barrels per day.
Key Takeaways:
- OPEC+ announced a strategic decision to cut oil production, influenced by Saudi Arabia's desire to maintain high oil prices.
- The production cut will reduce output by an additional one million barrels per day, which is expected to have significant implications for the global oil market.
- OPEC+ plays a crucial role in the oil industry and their decisions can greatly impact oil prices worldwide, affecting gas prices and the stock market.
- The decision to cut production reflects the ongoing power dynamics within the global oil market, with Saudi Arabia showcasing its influence within OPEC+ by successfully lobbying for the production cut.
- The move by OPEC+ underscores the importance of oil prices in supporting national economies, as Saudi Arabia seeks higher prices to bolster its own economy.
In a strategic move, the OPEC+ oil cartel, comprising members of the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers like Russia, announced on Thursday that they would be cutting oil production. This decision was heavily influenced by Saudi Arabia, as the country was keen on maintaining high oil prices.
The group decided to reduce production by an additional one million barrels per day. This decision is expected to have significant implications for the global oil market.
OPEC and its allies, known collectively as OPEC+, have been key players in the oil industry for many years. Their decisions can significantly impact oil prices worldwide, affecting everything from gas prices to the stock market. This recent decision to cut production is a strategic move aimed at keeping oil prices up.
The decision by OPEC+ also reflects the ongoing power dynamics within the global oil market. Saudi Arabia, one of the world's largest oil producers, has been pushing for higher oil prices to support its economy. By successfully lobbying for a production cut, it demonstrates the influence it wields within OPEC+.
Brent crude oil – technical trading view
The share price of brent crude has formed an inverse head and shoulders reversal pattern (shaded grey). The reversal pattern suggests that the near-term downtrend is now reversing into a short-term uptrend. A close above 82.60, the neckline, would confirm the pattern. In this scenario, 87.20 becomes the initial upside resistance target from the move, while a close below the 80.60 level might be used as a stop loss indication.
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Live prices on most popular markets
- Forex
- Shares
- Indices
