The global oil prices have taken a sharp turn after the reports of deeper production cuts from the OPEC+ countries. Consequently, Brent crude oil price extended its gains today after a 4.02% gain on Friday. At press time, the British benchmark of crude oil was up 2%.
This move also marks a downside retest of the 200 MA which is also evident from the following chart.
If Brent crude oil price breaks above this key moving average, the recovery rally may catch fire. This week’s OPEC+ meeting which is scheduled for Sunday, 26 November, may act as a catalyst in this regard.
However, it is also very likely that the markets overreact and the black gold will become overvalued before the meeting. This may result in the sell-the-new event next week.
To avoid getting carried away with the supply cut reports, it is better to analyze the Brent crude price chart which shows no major shift in the market structure. I will wait for a daily closure above $84 to before calling for any significant reversal.
I will keep sharing my updated oil forecast on Twitter, where you are welcome to follow me.
