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Pending OPEC+ Decisions to Change Production Quotas

12/1/2022 10:48 AM

During the Asian session, Brent Crude Oil shows ambiguous dynamics, holding near 86.80.

Yesterday, quotes were actively growing against the backdrop of weakening positions of the US currency after the head of the US Federal Reserve, Jerome Powell, confirmed analysts' fears, saying that the pace of tightening monetary policy could be reduced as early as December. The official stressed that such actions of the regulator should not be taken as a signal for the completion of the interest rate hike cycle, and the rate will remain high for a long time, at least until inflation falls to the target level of 2.0%.

The asset was supported by news from China, where the authorities recorded a slight decrease in the number of COVID-19 diseases, and in the city of Guangzhou, they announced an easing of quarantine restrictions. Recall that massive ones have continued in the country in the past few weeks due to the worsening epidemiological situation, and many industrial enterprises have suspended work.

In turn, the positive dynamics of the trading instrument are constrained by the expectations of the OPEC+ meeting, which will be held on Sunday. Reuters sources note that the cartel members do not intend to introduce additional cuts in hydrocarbon production, as they did in October when plans were adjusted by 2.0M barrels per day due to the unstable situation. On Monday, December 5, increased volatility is expected in the market due to the entry into force of the embargo on sea supplies of Russian oil. Also, due to disagreements within the bloc, the EU plans to introduce a price limit for Russian oil but still cannot decide on its value. The decisions of the European authorities may act as a driver for the growth of quotations without adjusting production quotas.

On the daily chart, Bollinger bands are actively decreasing: the price range is narrowing, reflecting the ambiguous nature of trading in the short term. The MACD indicator is growing, keeping a relatively strong buy signal (the histogram is above the signal line). Stochastic keeps a confident upward direction. However, it is near its high, indicating that the instrument may become overbought in the nearest time intervals.

Resistance levels: 87.33, 89.20, 91.00, 92.47. | Support levels: 86.00, 83.89, 82.27, 81.00.

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