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Oil Is Getting Ready for a Breakthrough

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Oil continues to rise, simultaneously updating new annual maximum at around $ 68.13 per barrel. The asset is located near the upper boundary of the medium-term price channel, which moves from mid-February. Today is the second attempt to break through it, last time it happened on March 14th and Brent also updated new maximum since last November. Currently, $66.6 acts as a strong support level, therefore long positions can be considered if the quotes fall back to that area.

In the meantime, bulls are likely to cope with local resistance levels and surpass $70. In the longer term, some analysts see a return of October numbers with the price around $80 per barrel.

Positive dynamics were created by OPEC actions. Last weekend, Saudi Arabia and Russia agreed to decrease the rate of oil production. According to OPEC+, countries are going to reduce production by 1.2 million barrels per day in the first half of 2019. Further, the cartel has canceled its meeting scheduled for April, therefore reducing production will continue until June. Most likely this is a signal that OPEC+ and its allies will continue the chosen policy until the end of 2019. On Monday, the minister of energy of Saudi Arabia expressed an opinion that excess of supply over demand is still observed on the oil market and it seems that market agrees with him, judging by the last price reaction.

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Source: https://olymptrade.com/
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