Yesterday’s OPEC+ ministerial meeting lent strong support to oil prices. At the meeting, the alliance stuck to the previous terms of the deal, with output set to rise gradually through to July. Russian Deputy Prime Minister Alexander Novak said that OPEC+ raised its forecast for oil demand growth in 2021 to 6 mbpd, up from 5-5.5 mbpd expected at the beginning of the year.
The Brent price started off trading at $69.2/bbl on Tuesday, June 1. Following upbeat news, the price action broke out of the key $71.0/bbl resistance level and pushed as high as $71.2, retracing to its May 2019 high. Oil traders took profit at that level, and after a correction the commodity closed at $70.4/bbl.
Oil has been trading sideways on Wednesday morning, and by noon, prices were hovering around yesterday's close. We see Brent’s trading range for the rest of the day at $69.7-71.1/bbl. The medium-term range for Brent, after yesterday's breakout at $71.0, expanded to $64.5-72.7/bbl. The API report is due out late this evening. To remind, crude oil inventories showed a drawdown of 439,000 bbl last week.