Crude oil prices traded higher on Friday after the Organization of Petroleum Exporting Countries and its partners (OPEC +) declined ignored US calls to raise production beyond its scheduled 400,000-barrels per day increase per month. The US was calling for an increase of at least 800,000 barrels per day to combat rising natural gas prices.
In declining the US appeal, the OPEC + alliance said it expected weaker demand for Q4 2021 and Q1 2022. This decision has not gone down well with the US, which says it could deploy the “full range of tools” range of tools at its disposal to combat the impact of high energy prices on its economy. The US response probably stems from the report of the Energy Information Administration, which showed a huge increase in US oil inventories for the week ended 29 October.
Crude oil price on the Brent benchmark is up 2.25% but could see limited upsides as the markets watch for a potential US response.
The rise in Brent crude could hit resistance at the 83.08 price mark. If the price action overcomes this level, 84.11 and 85.32 become additional upside targets.
On the other hand, rejection at 83.08 sets up a potential downside move towards 81.91. If the bulls fail to defend this level or the US decides to flood the markets with oil from its reserves, a further decline could be on the cards. This decline would target 80.00 and 77.93.
Follow Eno on Twitter.
This post was last modified on %s = human-readable time difference 16:03