Brent Oil Prices Under Pressure Despite OPEC+ Production Cut
Andrey Goilov | Jun 06, 2023 08:48AM ET
The crude oil market has been unable to capitalize fully on recent news developments, with selling pressure leading to a decline in Brent crude oil prices, which have slipped to 76.50 USD per barrel.
The OPEC+ meeting that took place last weekend culminated in Saudi Arabia's decision to reduce its July oil production by 1 million barrels a day. This reduction equates to roughly 1% of the world's daily crude oil consumption, signifying a substantial cutback. However, there is still uncertainty as to whether this decision will be implemented in practice.
Furthermore, OPEC+ announced an anticipated decrease in production by 2024, a prospect that investors are skeptical of.
Technical Analysis:
On the 4-hour chart (H4), Brent crude oil completed a growth wave to 77.49 and is currently in a correction phase. A decline to 75.00 is projected, following which a new growth wave could push prices up to 79.50. If this level is breached upwards, there could be potential for a further surge to 80.08. However, this represents only half of the projected ascending wave, with the primary target set at 87.00. The Moving Average Convergence Divergence (MACD) indicator validates this scenario: its signal line is above zero and is moving out of the histogram range, suggesting an upcoming price correction.
On the 1-hour chart (H1), Brent crude has formed the structure of an upward wave to 78.10. The market is currently correcting towards 75.00. Once this correction phase is over, a new growth structure could develop towards 78.66. This scenario is supported by the Stochastic oscillator. Its signal line continues to decline towards 20, after which a climb to 80 is expected to begin.
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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