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Brent set to break out of downtrend after OPEC+ supply cut

Oil has been given a boost after the OPEC+ decision to lower output by 2 million bpd in November.

Brent oil is currently trading back above its 50-day simple moving average (SMA) for the first time in over a month, holding on to most of its gains since last week.

Brent set to break out of downtrend after OPEC+ supply cut

Still, Brent has yet to surpass its mid-September cycle peak, as markets continue to exhibit concern surrounding the conflicting supply-demand risks.

Russia has threatened to cap flows if the US-led price cap is imposed, even while central bankers worldwide continue to incur “demand destroying” rate hikes to dampen inflationary pressures.

Oil bulls will hold the $100 mark firmly in their sights if Russia and/or OPEC+ continue raising the prospects of further supply interventions.

Ultimately, the latest OPEC+ decision suggests that oil prices find themselves back in a supportive environment, with prices on the cusp of breaking out of its downtrend that has persisted since June.

 

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