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Crude Oil Jumps in Immediate Reaction to Expected OPEC Announcement

Crude Oil Jumps in Immediate Reaction to Expected OPEC Announcement

Justin McQueen, Strategist

OPEC, Oil Analysis & News

  • OPEC+ Agrees to Gradual 400kbpd Production Hike
  • Oil Prices Surge to Multi-Year Highs

Oil prices have surged to fresh multi-year highs, 3yrs for Brent Crude and near 7yrs for WTI Crude. OPEC+ agreed to stick to its planned 400kbpd hike in oil production, which had been largely expected. As such, the size of the move higher in crude oil may be somewhat of a surprise given that calls for a slightly higher than expected output increase were minimal at best.

While OPEC+ continue to take this gradual approach to raise oil production, the Saudi Aramco CEO provided an update regarding the ongoing natural gas crisis, which is anticipated to have boosted oil demand by 500kbpd than otherwise would’ve been the case.

Brent Oil Chart: 1-minute Timeframe (Chart 1)

Source: IG

Taking a look at the chart, Brent crude has made a key break above the descending trendline from the all-time high, which may entice momentum players to keep risks tilted to the upside. Naturally, with little in the way of resistance, eyes will be on the 2018 peak at $86.65.

Brent Oil Chart: Monthly Timeframe (Chart 2)

Source: IG

--- Written by Justin McQueen, Strategist

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.