. Oil Prices Soar: OPEC+ Talks and Black Sea Turmoil

Oil Prices Soar: OPEC+ Talks and Black Sea Turmoil

Oil Prices Soar: OPEC+ Talks and Black Sea Turmoil

29 Nov 2023

Oil experiences an increase ahead of OPEC+ meeting as Black Sea shutdown support.

Fundamental Overview:

On Wednesday, the surge in oil prices was prompted by investor focus shifting to an OPEC+ meeting determining output policy. Additionally, disruptions in supply due to a Black Sea storm and diminished U.S. inventories fuelled buying activity.

On Tuesday, both benchmarks registered a 2% increase as the market predicted that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia (OPEC+), would either extend or intensify supply cuts.

On Wednesday, OPEC+ continued discussions, characterized as challenging by sources. However, sources indicated that the meeting to determine next year’s output policy on Thursday was expected to proceed as planned.

“If OPEC+ doesn’t reach an initial agreement, there is a possibility of further delays in the meeting, potentially exerting downward pressure on oil prices,” noted Warren Patterson and Ewa Manthey, analysts at ING Bank, in a client communication.

State officials and port agent data report that a significant storm in the Black Sea region has disturbed up to 2 million barrels per day (bpd) of oil exports from Kazakhstan and Russia. This situation raises the possibility of short-term supply constraints.

Support for the oil market also stemmed from a decline in U.S. crude inventories.

Brent Crude Oil Technical Analysis Daily Chart:

brent crude oil

Technical Overview

Brent Crude Oil is currently trading within an up channel.

Brent Crude Oil is positioned above all Moving Averages (SMA).

The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a positive trend.

Immediate Resistance level: 82.83

Immediate support level: 79.30

How To Trade Brent Crude Oil

Following a notable surge, Brent Crude Oil encountered resistance, leading to a subsequent decline. However, the price later stabilized and found support, consolidating at a stable level. Currently trading around a crucial resistance zone, a potential breakthrough in this zone could lead to further upward movement.