Crude oil price has recouped some of Thursday’s losses as the market digests OPEC+ decision to go on with its current plan to gradually restore production. Investors were keen on the alliance’s move to counter the latest COVID-19 variant and the plan by various customers to release oil from their SPRs.
OPEC+ decision is a sign that the group is not worried about Omicron’s impact on global oil demand. However, the alliance was quick to add that it is monitoring the situation. This means that it is open to swiftly shifting its stand if needed.
Crude oil price prediction
Brent futures have erased some of its previous losses, even as the commodity remains under pressure. The benchmark for global oil bounced off Thursday’s low of 65.83 as a reaction to OPEC+ supply decision.
Even after the rebound, crude oil price is still on a downtrend. Since dropping below the psychologically crucial level of 80 a week ago, it has dropped by over 10%. At the time of writing, Brent oil was up by 1.02% at 71.22.
On a four-hour chart, it is trading along the 25-day EMA and below the 50-day EMA. In the short term, I expect crude oil price to experience some resistance along the 25-day EMA around 72.00. Heightened bullish momentum will likely push the commodity higher to along the 50-day EMA at 74.29. However, the bulls would need to first break the resistance at 73.37.
On the flip side, the psychological zone of 70 will likely offer steady support to the commodity. Below that point, 69.05 will be a feasible support level.