Crude oil prices have shown marginal gains this Monday after Reuters reported a drop in the total oil output from the Organization of the Petroleum Exporting Countries (OPEC) in February.
Total oil output from OPEC member countries was reported to have declined by 870,000 barrels per day (bpd), making this the first time that output has declined in eight months.
Reuters said the OPEC oil output drop was primarily led by Nigeria, which saw the biggest drop as it battles raging insurgency issues. Saudi Arabia was also among the top contributors to the output drop, as it followed through with its announced voluntary cuts). Compliance levels with the latest OPEC+ output cut pledges climbed to 121% in February, representing an 18 points increase from January.
Brent crude rose 0.25% on the day.
Technical Levels to Watch
Crude oil price on the Brent crude benchmark has bounced on the double support formed by the ascending trendline and the 64.26 price level on the daily chart. However, more follow-through buying is needed to enable crude oil price hot the 65.95 resistance target. Additional targets to the upside lie at 66.81 and 67.55. If the price exceeds the latter target, this takes crude oil price towards new 2021 highs and opens the pathway for a continuation of the recovery towards 69.76 and possibly 71.44.
On the flip side, a decline below the current support levels allows bears to seize the initiative, which could lead to a drive lower towards 62.21 initially. Below this level, additional targets lie at 60.07 and 57.47. The latter target lies at the 50% retracement point from the swing low of 1 February 2021 to the recent swing high of 25 February 2021 and could prove to be a vital downside target for those waiting for dip-buying opportunities.
Crude Oil Price (Brent); Daily Chart