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Analysis suggests oil uptrend before OPEC+ meet

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Nhim Kosol, PPLS business manager

Analysis suggests oil uptrend before OPEC+ meet

At the beginning of November, crude oil dropped from its monthly high of $93.70 per barrel to a low of $70, still indicating a monthly downtrend, says PP Link Securities business manager Nhim Kosol.

However, based on the PP Link Securities platform, crude was trading at around $80 per barrel on Tuesday, and technically preparing to go up in the short term.

Investors should take into account concerns related to changes in fuel supply and demand when considering short- and long-term trading benefits.

The Financial Times reported on Saturday: “Oil prices fell sharply [last] week as mounting concerns about weakening fuel demand in China outweighed fears that Russian supply could drop next month when tighter EU sanctions on its crude exports come into force.”

On Monday the price of oil rowed back on losses after Saudi Arabia denied a Wall Street Journal report it was considering increasing output, Reuters said, with the Organization of the Petroleum Exporting Countries and its allies (OPEC+) set to keep with cuts.

Back in early October, OPEC+ agreed to decrease output by two million barrels per day.

US President Joe Biden was “disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine”, the White House said at the time, the WSJ reported.

Reuters reported on November 21:

“Saudi Arabian energy minister Prince Abdulaziz bin Salman said the kingdom is sticking with output cuts and not discussing a potential oil output increase with other OPEC oil producers, state news agency SPA reported, denying the [WSJ] report.

“[The WSJ] earlier on Monday reported an output increase of 500,000 barrels per day was under discussion for the next meeting of [OPEC+] on December 4. The report cited unidentified OPEC delegates.

“Oil prices, which had slid more than five per cent to below $83 a barrel after the [WSJ] report, pared losses following the minister’s comments.

For this week’s trading recommendation, oil may technically trade in the range of $75 to $85 per barrel.

With an average price of $80, investors can buy with a limit order at $78.5, setting the take-profit function at $85 and the stop-loss at $74.

Content image - Phnom Penh Post

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