Crude oil price is strongly higher today despite the lowering of demand forecasts by the oil cartel, OPEC.
A Reuters report which cited an internal document from the organization indicates that demand growth forecasts were lowered from 5.9 million barrels per day in the January edition of the report, to 5.6 million barrels per day.
The report also said that OPEC + experts predicted a drop in oil stocks every month in 2021, with a total fall in oil stocks by 406 million barrels for the year.
An analysis of the report indicates that while demand forecasts are lower, OPEC also sees a drop in oil stocks, which could offset the lower demand. As a result, crude oil prices on the WTI and Brent benchmarks rose on Tuesday, with Brent crude rising 2.68% presently.
Also supporting crude oil prices is the risky sentiment that has pervaded the market from vaccine data, with OPEC + member Russia’s Sputnik coronavirus vaccine said to show 91.6% efficacy under peer-review, as per Reuters.
Technical Levels to Watch
Today’s bullish move has violated the resistance at 57.47. If the candle closes above this level, this forms a higher high and along with already established higher lows, restores the recovery move. This move opens the doorway towards the 60.07 resistance, with 62.21 now coming into the picture as a potential future target.
On the flip side, failure to establish a breakout situation opens the door for a pullback towards 56.47, with 53.99 and 52.38 serving as additional targets to the south.
Brent Crude; Daily Chart