Crude oil prices could be in for a huge jolt soon if the recent report by the Wall Street Journal surrounding output decisions by OPEC + is anything to go by. Reuters picked up chatter from the Wall Street Journal on Wednesday, saying that the OPEC + alliance is considering a boost of 500,000 barrels per day to the collective output of the alliance.
Crude oil prices have been trading above the $70 mark on the Brent benchmark, following recovering demand as the global economy rebounds from the worst of the coronavirus impact. They are presently trading at 2-year highs, up 1.35% after the American Petroleum Institute (API) reported a sharp drop in inventories by 7.2million barrels last week.
The Energy Information Administration’s version of the report is due an hour from now. Last week’s EIA crude oil inventories report showed a massive shortfall in inventories, as rising gasoline demand pushed US refining capacity to near-peak levels.
Technical Levels to Watch
Crude oil price on the Brent benchmark now trades at the upper border of the channel. There is an intraday violation of the 75.52 resistance level. If the price action breaks this level, we could see a run towards the 77.93 mark (30 October 2018 high).
On the other hand, a reprieve could follow rejection and a pullback from the current resistance, targeting 73.34 initially, before 71.44 and 70.00 come into the picture as potential downside targets.