Crude oil price has edged lower ahead of the monthly OPEC+ meeting. Brent futures are down by 2.11% at $88.77. At the same time, WTI futures have declined by 0.23% at $87.07.
OPEC+ meeting
In the ensuing sessions, crude oil price will be reacting to the OPEC+ meeting that is scheduled for Wednesday. The group of petroleum-producing countries comprise of 13-member states led by Saudi Arabia and another 10 non-member states steered by Russia.
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Since the beginning of 2021 as economies recovered from the coronavirus pandemic, OPEC+ meetings have impacted crude oil price movements. The organization have used the monthly events to boost prices by either highlighting its inability to meet heightened demand or enact output cuts to maintain the needed balance.
Late last year, it dismissed calls by key customers like the United States, India, and China to pump more oil into the market as demand rose steadily. The alliance’s decision aimed at boosting prices towards the forcasted $80 per barrel.
Interestingly, February’s meeting comes at a time when the alliance is struggling to meet the agreed-upon quota of 400,000 barrels per day (bpd). While analysts expect the group to agree on the current program of a 400,000 bpd increase, the focus will be on how it will deal with the issue of dwindling spare capacity.
At the same time, the ongoing geopolitical tensions have continued to boost crude oil price. Russia has maintained that it does not intend to invade Ukraine. Nonetheless, US General Mark Milley has stated that the Russian troops build-up near the Ukriane border is the largest since the Cold War. An invasion would yield supply disruptions at a time when supplies are already tight.
Crude oil price prediction
Brent futures, the benchmark for global oil, has dropped below the critical level of 90 while still being on an uptrend. On a four-hour chart, it is trading above the 50-day exponential moving averages and slightly below the 25-day EMA.
As investors await further cues from the OPEC+ meeting, crude oil price will likely trade within a rather tight range of between 90.55 and 88.50. Even with the probable price swings, I hold a bullish bias for as long as Brent oil remains above 80.
A move below the range’s lower border may have it drop to 87.27. On the upside, if the bulls gather enough momentum to break the resistance at 90.55, they will have an opportunity to retest last week’s multi-year high of 91.70.
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