Brent crude returns to $81.05 amid OPEC+ deals

prices rebounded to $81.05 a barrel on Monday, stabilizing after recent selling pressure. Market focus now turns to the results of the OPEC+ meeting held over the weekend, where members agreed to extend collective production cuts until the end of 2024.

The agreed plan includes a voluntary cut of 3.66 million barrels per day, which will expire at the end of 2024. In addition, OPEC+ committed to cut 2.2 million barrels per day for the third quarter of this year. In addition, eight OPEC+ countries announced plans to phase in additional cuts of 2.2 million barrels per day from October 2024 to September 2025.

Despite these cuts, oil prices fell nearly 6 percent in May, driven by uncertainties about demand and concerns about potential high interest rates maintained by the US Federal Reserve. These rates could slow economic growth and dampen commodity interest, impacting the energy sector.

Technical Analysis of Brent Crude Oil

On the H4 chart, Brent is currently forming a consolidation range around the $81.50 level. There is potential for this range to extend downward to $79.79. If this level is reached, a retracement to $81.10 (testing the bottom) could follow, with further downside possible. The correction could extend to $78.00 before a new rally towards $85.00 begins. This scenario is technically supported by the MACD indicator, with the signal line above zero but pointing down.

On the H1 chart, Brent completed a bearish structure at $81.10, with a consolidation range forming around this level. A breakout to the downside could lead to a drop to $79.79. Following this, a corrective move to $81.10 could occur. Conversely, an upward breakout from the range could trigger a rally to $82.50. This setup is technically confirmed by the stochastic oscillator with the signal line at 50 and a downtrend towards 20.

Market Outlook

As Brent crude navigates the effects of OPEC+ production cuts and global economic uncertainties, investors should closely monitor future developments in commodity demand and central bank policies. The technical setup suggests volatility with potential downside and upside moves, making it crucial for traders to watch for breakouts from established consolidation ranges.

By the RoboForex analysis department

Disclaimer
Any forecast contained herein is based on the author’s own opinion. This analysis cannot be treated as trading advice. RoboForex assumes no responsibility for trading results based on trading recommendations and reviews contained herein.