Oil prices are under pressure due to OPEC+’s plans to increase production. The organization is raising output for the second consecutive month, with June's production set to grow by 411,000 barrels per day (bpd).
This intensified concerns about a supply glut in an already oversupplied market.
The June increase would bring the total combined production growth for April, May, and June to 960,000 bpd, or 44% less than the previously agreed cuts of 2.2 million bpd.
According to OPEC+ sources, the group may fully cancel voluntary production cuts by the end of October if member countries fail to comply with their quotas. Saudi Arabia is pushing OPEC+ to accelerate the cancellation of earlier cuts to penalize non-compliant members, particularly Iraq and Kazakhstan, for exceeding their production limits.
From a technical perspective, the long-term price target for Brent crude remains at $47 per barrel. But given today's gap at the market opening, Brent has a short-term technical target to close the gap and rebound to 60.65, the level of the recently broken local low.
The overall recommendation is to buy Brent crude.
Profits should be taken at the level of 60.65. A Stop loss could be set at the level of 57.50.
The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.
This content is for informational purposes only and is not intended to be investing advice.
