Crude oil prices on the Brent benchmark are off intraday highs but are still up 0.36% on the day as Hurricane Ida makes landfall in Louisiana and weakens to a tropical storm.
The hurricane, which had gained considerable strength in the last few days to a Category 4 storm, had forced the closure of several oil platforms in the Gulf Coast, shutting down production of 1.7 million barrels of crude oil. The supply constraints sent crude oil prices on the WTI and Brent benchmarks high, with five winning daily sessions out of the last six.
The focus of oil traders now shifts towards the Wednesday OPEC + meeting, with traders expecting the alliance to move ahead with the output increase earlier decided in July. However, Kuwait’s oil minister hinted that the coalition could reconsider the scheduled 400,000 barrels production increase.
Crude Oil Price Forecast
Monday’s upside move appears to have hit resistance at 73.34. This level must be broken for the crude oil price to recover towards 75.52, with 77.93 and 80.00 lining up as potential upside targets.
On the flip side, a decline below the dotted support trendline and the 71.44 support line is required for the bears to aim for the 70.01 psychological support. Below this level, 67.74, 66.81 and 65.95 are all viable targets that the bears recently tested successfully. A continuation of the scheduled output increase favours this outlook.