The OPEC+ group will meet at its headquarters in Vienna on June 1 to make a key decision on extending oil production cuts into the second half of 2024.
87% of traders and analysts surveyed by Bloomberg expect the Organization of the Petroleum Exporting Countries and its allies to extend the curbs, possibly through the end of the year.
Since its inception, OPEC+ has repeatedly shown that it can overcome differences and work effectively when faced with the collective risk of falling prices. A fragile market could again force the group to cut supply further.
What is intriguing is that it is not entirely certain in what framework this decision will be made.
Some OPEC+ officials have said privately that it is too early to form an opinion.
Internal disagreements could also prevent a consensus. While Saudi Arabia often advocates caution when adding supplies to the market, its neighbor the United Arab Emirates sometimes takes a conflicting stance.
In addition, OPEC+ will need to determine whether all members are fully complying with their commitments, which will have an impact on agreeing parameters for each member country in the alliance.
Therefore, any statements made by the group's representatives ahead of the June 1 meeting will lead to increased volatility in the oil market.
From a technical point of view, Brent crude oil prices have left the untested level above the current value of $85.0 per barrel.
The presence of such a price gap indicates the likelihood of an upward movement of Brent oil prices towards this level. Statements or hints from the participants of the group about the possible consensus on production cuts will be the impetus for this movement.
The overall recommendation is to buy Brent oil in case of publication of various speculative statements about reaching an agreement among the alliance members on production cuts for the second half of 2024.
Profit could be taken at the level of 85.0. Loss could be fixed at 81.0.
The value of possible loss should not exceed 2% of your deposit funds.
This content is for informational purposes only and is not intended to be investing advice.
