Crude up 1.92%E, OPEC+ extends output cuts will support further

The price of crude oil rose by almost two percent on Friday. Prices also rose as OPEC+ members agreed to extend voluntary oil production cuts of 2.2 million barrels per day into the second quarter, largely in line with market expectations.

Cutting production by the Organization of the Petroleum Exporting Countries (OPEC+) is expected to soften the market. due to global economic problems and growth in non-group production, and the Russian announcement surprises some analysts.

Russia will cut its oil output and exports by an additional 471,000 barrels per day (bpd) in the second quarter, in coordination with some OPEC+ participating countries, its Deputy Prime Minister Alexander Novak said on Sunday.

Rising geopolitical tensions due to the Israel-Hamas conflict and Houthi attacks on Red Sea shipping have supported oil prices in 2024, although concern about economic growth has weighed.

Yemen’s Iran-backed Houthis vowed on Sunday to continue targeting British ships in the Gulf of Aden following the sinking of UK-owned vessel Rubymar.

In some of the strongest comments by a senior U.S. leader, U.S. Vice President Kamala Harris on Sunday demanded Palestinian militant group Hamas agree to an immediate six-week ceasefire while forcefully urging Israel to do more to boost aid deliveries into Gaza.

Washington has insisted the ceasefire deal is close and has been pushing to put in place a truce by the start of Ramadan, a week away. A U.S. official on Saturday said Israel has agreed on a framework deal.

Technical Outlook

Crude oil prices witnessed more than 1.90% gain on Friday, settled at 6638 compared to previous day’s close of 6513.00. On a weekly basis prices gained nearly 4.50%.

As per the outlook given on 27 February, prices touched our first predicted levels of 6620. The next predicted levels are 6720.

On the above chart, prices still trading above triangle resistance, and forming a bullish candle stick. Also, prices trading above short-term moving average.

Hence, its expected that prices will remain positive and any dip towards 6550-6500 could attract buying activities in near future. On the downside, crucial support is seen at 6400 below it only prices could retreat towards 6320-6250.

Commodity Samachar
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Also Read: Eurozone inflation, China PMI to watch. , Silver – Likely to remain positive.

Recommended Read: Forex Newsletter – 01 Mar 2024

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