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Oil Is Supported by a New Possible OPEC+ Deal

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Brent crude oil returned to the price channel in which it has been trading since the beginning of the month. The local level of resistance is at $60.0 per barrel. After the breakthrough of this level, the next target for bulls will be at $61.0. The most likely scenario in the short and medium-term is the continuation of consolidation in the area of $57-61. From the point of view of technical analysis, it is extremely important that bears do not lower the price below $54, otherwise, the line of the long-term 2-year trend will be broken and most likely new panic sales will begin after his. As for the longer term, many analysts consider the IMF forecast to be fairly objective. According to a recently published report, fund analysts reduced their forecast for 2019 and 2020 by almost $4 and $6 respectively - to $61.78 and $57.94.

Local support for quotes is provided by reports on a new OPEC+ deal. The challenge for Saudi Arabia, the formal leader of OPEC, globally is to maintain oil prices above the 5-year average. The main tool for this is the limitation of production, and this will be the main topic for discussion on December 5-6 in Vienna in the OPEC + format. Riyadh is ready to take on the bulk of the additional reduction, but there are problems with 2 participating countries: Nigeria and Iraq, which for various reasons did not limit their production. This can be a stumbling block to reaching an agreement with other countries. Globally, there is a risk of a global recession; the IMF has been revising its forecasts for global GDP several times in a row. Accordingly, the demand for oil will also decrease, which means that the supply should be limited even more. There is no other way for OPEC+ or anyone to understand this today.

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Source: https://olymptrade.com/
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