Brent crude – Steady as OPEC confirms meeting date

OPEC to meet after G20

OPEC’s website this morning confirmed that it’s meeting will take place a few days later than initially planned, with it now seemingly penned in for 1 and 2 July, the latter of which will include allies including Russia.

The decision to delay the meeting may well relate to the G20 and talks taking place between the US and China, with the trade war seen as the greatest threat to the global economy at the moment and one that has led to downward revisions to oil demand growth, weighing on prices.

With this in mind, the next couple of weeks could be very volatile for oil prices, with inventory data adding another cause for concern for producers, given the recent inventory numbers. API reported a slight reduction on Tuesday – EIA is expected to confirm this later on today – which may alleviate some of the downward pressure in the near-term.

Brent Daily Chart

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As far as price in concerned, it remains subdued, with $60 coming under repeated pressure this month. The inability to top previous highs on rallies won’t be comforting for bulls, although with so many different factors driving price right now, unpredictable events could change the look of the charts. Just look at the spike last week following the tankers attack in the Gulf of Oman.

Should $60 break, it could be a bearish signal in the near-term, with $58 being the next notable level below and $55 below that. A break back above $64.70 could mark a reversal in the trend, resulting in a double bottom and giving a possible price projection – based on its size – of around $69. Of course, there’s never a guarantee with these and they’re not meant to be precise.

 

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.