Crude oil price managed to break out of a consolidation area as OPEC+ meeting agreed to increase supply by 500k barrels/day starting with January 2021. The news sent the Brent oil price close to $50 while generating a bullish breakout on the WTI crude oil price too.
Moving forward, the next three months in 2021 will be crucial for the crude oil price. More precisely, fluctuations in demand based on how the pandemic evolves will make OPEC revise its plan if necessary.
At this point, the bounce from the lows in the price of oil has been credited to the announcement of COVID-19 vaccines. Three potentially effective vaccines were announced in the month of November, and that means fewer lockdowns than initially thought in 2021. As such, the crude oil price rallied, just like the stock market did.
Crude Oil Technical Analysis
The technical picture remains bullish, as it was even before this week’s OPEC and OPEC+ meetings. With the current breakout, the crude oil price managed to put a marginal new high and remains in the rising channel. For as long as this holds, bulls are in control. To trade on the long side, bulls may want to stay long with a stop below the rising channel and targeting the continuation pattern’s measured move, shown below in orange.