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Brent Crude Oil Upward Momentum May Continue

10/17/2022 1:43 PM

Benchmark Brent Crude Oil is correcting to trade just above 91.00 after OPEC+ decided to cut production by 2.0M barrels per day.

The cartel's actions caused a lot of discussion from Western countries, but the organization's secretary general, Haitham al-Ghais, said that this deal was not a political decision but was dictated solely by the balance of supply and demand. In his opinion, the situation on the market may change significantly soon, and the cartel needs to react now. According to other officials, these measures are dictated by a ban on importing oil and petroleum products from Russia to the EU, which will come into force on December 5.

As for the balance in the contract market, the recent increase in asset quotes was quite predictable, and the likelihood of its continuation remains quite high. According to the US Commodity Futures Trading Commission (CFTC), the number of net speculative positions in raw materials continues to increase, reaching 259.8K last week compared to 242.0K earlier. Thus, the positive dynamics continue for the seventh week, reaching early autumn levels.

On the daily chart of the asset, the price is moving within a downwards corridor near the resistance line.

Technical indicators keep a buy signal: fast EMAs of the Alligator indicator are above the signal line, and the AO oscillator histogram forms bars in the buy zone.

Resistance levels: 93.86, 99.00. | Support levels: 88.80, 82.37.

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