Crude oil price has eased on its rallying as it faces resistance at $72. OPEC+ raised its forecast for global oil demand, an aspect that boosted prices.
OPEC Monthly Oil Market Report (MOMR)
The Organization of Petroleum Exporting Countries (OPEC) has raised its forecast for global oil demand, an aspect that has boosted crude oil price. On Monday, the alliance adjusted its demand estimates to 100.8 million barrels per day (bpd) in the coming year. This is in comparison to the pre-pandemic levels of 100.3 bpd.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
In the highly-anticipated report, the organization exhibited optimism that global oil demand will return to 2019 levels over the entire year. This is in comparison to its prior forecast when it predicted that it will reach the pre-pandemic levels in the second half of the coming year. The optimism is rooted on the market’s confidence that countries will have improved their management of the COVID-19 pandemic. That aspect, coupled with the anticipated increase in vaccination rates across the world, will likely heighten recovery of the travel sector.
OPEC’s forecast has come as a surprise as some experts expected the alliance to lower its estimates rather than raise it. In comparison to OPEC’s demand growth forecast, EIA expects the milestone of 100 million bpd to be surpassed in Q2’22. The market’s reaction to Monday’s report places crude oil price at an inch closer to Goldman Sachs’ forecast of $80 per barrel by the end of the year. In the ensuing sessions, the resistance level to watch out for will be $75.
Brent oil price prediction
Crude oil price has eased after its two-day rallying. After hitting a low of 70.84 on Thursday, Brent futures – the benchmark for global oil – has since surged by about 3.49%. Despite the heightened volatility in the oil market, the price has remained steady above the crucial support level of 70 since late August.
At the time of writing, it was up by 0.82% at 73.46. On a two-hour chart, it is trading slightly above the 25 and 50-day exponential moving averages. In the near term, it will likely continue finding support along the 25-day EMA at 72.93. A move above the current resistance level of 74 will likely place it at 75.
On the flip side, one cannot dismiss the likelihood of a decline past the current support level of 72.93. If that happens, the psychological level of 72 and lower support level of 70.87 are the levels to watch out for.
67% of retail CFD accounts lose money