Crude oil prices rose on Wednesday despite the increase in production by the Organization of Petroleum Exporting Countries (OPEC) and their allies.
The price of the Brent crude benchmark is up 1.2% on Wednesday, as traders interpreted the modest 400,000 barrels per day increase by the OPEC + for February 2022 as a sign that the cartel does not view the Omicron variant as a threat to crude oil demand. Furthermore, the drop in crude oil stocks reported by the American Petroleum Institute (API) also raised bullish bias on crude, leading to a third day of gains.
Commerzbank analysts have also opined that several members of the OPEC+ alliance are currently not meeting their quotas, and the expected shortfall in production despite the additional lifting of production curbs will only serve to undersupply the market in an environment of appreciable demand.
Brent crude is currently trading at $81.26 as of writing.
Crude Oil Price Outlook
Having cleared the neckline of the double bottom at 76.07, Brent crude is now on its way to a projected completion of the measured move at 81.91. A price extension beyond this point brings 83.08 into the picture as an additional target, with 85.32 also lining up as an upside target for the future.
On the other hand, a rejection at 81.91 allows the price action to retrace to 80.01, below which 77.93 and 76.07 come back into the picture, this time as support targets.