Crude Oil Price On the Way to $70 After OPEC + Agrees to Extend Output Curbs

Summary:

Crude oil price on the Brent benchmark looks set to hit the $70 mark after OPEC + and Saudi Arabia agree to extend output curbs.

Crude oil prices on both benchmarks surged on Friday after OPEC + oil producers agreed to extend the current production curbs until April. Saudi Arabia also surprised the markets by agreeing to extend its 1 million barrels per day production cut for another 2 months, providing a firm footing for crude oil prices to push higher.

Crude oil price on the Brent benchmark surged 3% on Friday, extending yesterday’s 4.85% gains to send Brent crude firmly on the path towards $70. The upbeat Non-Farm Payrolls report supports the notion of a steady recovery in unemployment in the US and by extension global economic recovery, which provides a great environment for risky commodities like crude oil to thrive.

Technical Outlook for Brent Crude

Brent crude looks set to hit 13-month highs with today’s ascent. A close above the 25 February high allows for further recovery in crude oil prices, targeting 70.01 as the initial price barrier. Above this level, 71.44 and 73.34 are two upside targets of interest, marking points were price had peaked on 8 January 2020 and 20 May 2019 respectively.

On the flip side, only a closing penetration below 66.81 allows bears to retest the downside targets at 65.95 and 64.26, with further support levels seen at 62.21 and 60.07. Any of these levels may also serve as potential dip-buying points, as long as markets retain the risk-on sentiment.