Daily Market Analysis and Forex News

Brent advances ahead of OPEC+ decision

Brent enters squeeze ahead of OPEC+ decision

Will cartel deliver or disappoint?

Supply cuts from OPEC+ could trigger 400-point rally

Brent in ascending triangle and above 21-day SMA

Oil extended gains on Thursday as market focus shifted towards the OPEC+ meeting that was postponed from last week due to internal disagreements.

Brent prices punched above $83 this morning after jumping almost 4% over the last two sessions after a severe storm in the Black Sea region sparked supply concerns. While this development has kept oil prices buoyed, the looming virtual OPEC+ meeting today is likely to influence the global commodity’s outlook.

Given the sharp selloff in oil prices since mid-September, OPEC+ could make further changes to an agreement that already limits supply into 2024. Indeed, oil has been hammered by concerns about weaker economic growth and expectations of a supply surplus in 2024. However, discord over output quotas for African oil-producing countries could act as an obstacle that leads to further delays in negotiations.

Oil prices may weaken if the cartel fails to reach an agreement on production quotas for 2024 or disappoint market expectations for deeper supply cuts.

Should OPEC+ move ahead with deeper supply cuts, this could lend oil bulls fresh support – pushing the global commodity higher as a result.

Technically speaking...

Since the November 16th low at $77.08, the black gold has rallied within an ascending triangle for over 600 points and as of the time of writing sits above its 21-day SMA at around $83.

According to Thomas Bulkowski in his book “Encyclopedia of Chart Patterns”, ascending triangles perform better with upward breakouts, with a 70% chance of meeting their breakout target, and a 17% breakeven failure rate.

Brent bulls may take any deeper production cuts as bullish and rally to the following key resistance levels.