OPEC+ would not allow the Crude Market to Disbalance
The opening trades after Thanksgiving Day brought no optimism for investors as some countries are debating on whether they should release oil from their reserves during a period when the demand is lagging amid new COVID-19 lockdowns in some European countries.
Brent crude prices are losing almost 6% and this may not be the final price. Taking the price chart into consideration I believe there must be an ABC correction after a significant upside movement. The current decline from $86.70 per barrel is commencing in a five wave structure, and we are currently in the first wave - A. But I do believe the A wave has not yet reached its targets and may end within the $74.98-75.75 area in order to meet the condition that Waves 3 and 5 should be 150% or 161.8% of the length of the Wave 1. If Brent prices fall to $76.50, the correction structure will be accomplished, as Wave 5 will be equal to Wave 1. Moreover, prices are supported by a long-term upward trend that started in April 2020 and now is crossing the $74.50-74.70 landmark. Specifically, this key landmark may play a decisive role in the current decline cramping selloffs.
Countries within the OPEC cartel and also countries outside OPEC have been divided as some need high crude prices while others are suffering from it. Saudi Arabia and Russia are ready to freeze any further oil production increases to compensate for interventions from the United States and other major crude importers. However, if El Riyadh and Moscow succeed in convincing other OPEC members and its allies to do this, it is really hard to say what will happen. UAE and Kuwait oppose such halts and may lead the others to follow them.
I think OPEC+ would not allow for any disbalances in the oil market knowing that the United States may easily pour some 70 million barrels into it and may react swiftly during the next meeting at the beginning of December.
Considering the above-mentioned scenario for Brent crude prices, we may expect an upside rebound and for prices to reach designated lows at $74.70-75.70 per barrel. Thus, the new wave B will start to push Brent crude prices towards $81-82 per barrel.
Brent crude prices are losing almost 6% and this may not be the final price. Taking the price chart into consideration I believe there must be an ABC correction after a significant upside movement. The current decline from $86.70 per barrel is commencing in a five wave structure, and we are currently in the first wave - A. But I do believe the A wave has not yet reached its targets and may end within the $74.98-75.75 area in order to meet the condition that Waves 3 and 5 should be 150% or 161.8% of the length of the Wave 1. If Brent prices fall to $76.50, the correction structure will be accomplished, as Wave 5 will be equal to Wave 1. Moreover, prices are supported by a long-term upward trend that started in April 2020 and now is crossing the $74.50-74.70 landmark. Specifically, this key landmark may play a decisive role in the current decline cramping selloffs.
Countries within the OPEC cartel and also countries outside OPEC have been divided as some need high crude prices while others are suffering from it. Saudi Arabia and Russia are ready to freeze any further oil production increases to compensate for interventions from the United States and other major crude importers. However, if El Riyadh and Moscow succeed in convincing other OPEC members and its allies to do this, it is really hard to say what will happen. UAE and Kuwait oppose such halts and may lead the others to follow them.
I think OPEC+ would not allow for any disbalances in the oil market knowing that the United States may easily pour some 70 million barrels into it and may react swiftly during the next meeting at the beginning of December.
Considering the above-mentioned scenario for Brent crude prices, we may expect an upside rebound and for prices to reach designated lows at $74.70-75.70 per barrel. Thus, the new wave B will start to push Brent crude prices towards $81-82 per barrel.
