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OPEC Rhetoric Locally Supports Oil

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Oil continues to grow, this week opening with a new bulls attempt at overcoming $73/b. As on May 16, the quotes updated the local maximum around $73.3. Forming a double top figure on the hourly chart, buyers slightly retreated for a new attempt at growth. Local support is situated in the $72.0-72.2 zone. If it is broken, bears can lower the price down to the global trend line near $71. However, this is an unlikely scenario. Most likely, Brent will continue to grow due to the current geopolitical situation, primarily in the Middle East region.

Oil’s price support was provided by the results of the meeting of the OPEC + monitoring committee, which was held over the weekend. The Minister of Energy of Saudi Arabia said that there is a common understanding between OPEC and the allies on a "soft" reduction in oil reserves. Nevertheless, representatives of the UAE don’t consider this as a “right decision” and are ready to fill in any shortcoming. OPEC + will take a formal decision at the next meeting on June 25.

However, the main instability in the region concerns another OPEC member country, Iran. President Donald Trump has already switched to threats on Twitter, “If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!” Hot escalation of such a conflict could have a significant impact on oil quotes, causing a medium-term strengthening of quotations. However, if the United States moves from word to action, it will affect the entire market.

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Source: https://olymptrade.com/
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