Brent crude oil price consolidates close to five-month highs ahead of the OPEC+ meeting on August 19. OPEC+ managed to stabilize crude oil prices after the sharp drop in Brent crude oil price at $16 per barrel, reaching an agreement to cut oil production.
OPEC+ agreed of 9.7 million barrels per day production cuts, while after the rebound in crude oil prices, OPEC+ agreed to reduce the production cuts to 7.7 million barrels per day starting August 1. Further production cuts came from the USA as the operating oil rigs are at four-month lows.
The demand for crude products has rebounded after the economies lifted the coronavirus lockdown measures, but it is still far behind the demand on pre-coronavirus levels. News that Chinese oil firms have booked tankers to import at least 20 million barrels of U.S. crude supports the prices. Robust industrial production data from China point to a sharp recovery and higher demand for crude oil.
EIA has revised downward its estimates for oil production and now expects that U.S. crude production will drop by 990,000 barrels per day in 2020 to 11.26 million barrels per day. The EIA previous forecasts were for 600,000 barrels per day decline.
Brent Oil Price Daily Technical Analysis
The crude oil price is 0.44% lower at $44.74 close to daily lows in a muted session keeping the positive sentiment alive. Crude oil price trapped in just 1.6 dollars trading range between 44 and 45.6 waiting for the new catalyst that will break the trading range.
On the daily chart, minor support is at 44.69 today’s low. More bids would emerge at 44.38 the low from August 11. Next strong support would be met at 43.18 the low from August 4.
On the downside, immediate resistance for Brent crude oil price is at 45.19 the daily high. A break above would meet the next hurdle at 45.56 the top from August 12. The recent highs at 46.26 would provide the next supply zone.
Brent Crude Oil Daily Chart