- Reports claim that OPEC and its allies will cut back on previous oil cuts as demand improves.
- Economic recovery spurs demand oil as lockdown measures are eased.
- Concerns still loom over the viral threat.
Many governments worldwide have eased the restrictions that had been put in place to prevent the spread of the coronavirus. The measures hugely affected the oil industry, with prices dropping to record lows as demand plummeted. This resulted in production cuts implemented to support oil price recovery. However, OPEC and its allies are planning to ease the production cuts in favor of more production as oil demand improves due to the reopening.
Key OPEC officials and some Russian officials will hold a teleconference meeting on Wednesday, during which they are expected to discuss the best possible approach. Increased oil production is one of the topics that they are expected to discuss.
Oil – Weak Bearish to Neutral
Technical View :Long Above 40.41
Target :40.61, 40.65, 40.85
Technical View :Short Below 40.01
Target :39.81, 39.76, 39.57.
The crude oil price performance on Monday morning highlights a weak bearish performance, but experts anticipate a price increase if the oil industry officials decide to boost production. Crude prices are expected to test key levels at 40.61, 40.65, and 40.85 if crude prices rally above 40.41. However, they are expected to show support levels at around 39.81, 39.76, and 39.57 price levels if the price falls below 40.01.
there have been some slight price increments in crude prices over the past few weeks thanks to increased demand as economies across the world ease their COVID-19-related restrictions. Analysts believe that a decision to increase production from the current 9.7 million barrels will meet the demand while also allowing the oil companies to recover.
Despite the expectations, there are still concerns that the crude oil industry might not be out of the woods yet. There is still no cure for the coronavirus, which is the threat that resulted in the demand crash in the first place. There are concerns that governments might be forced to implement more restrictions in the past if the pandemic crisis continues. Such a move would negatively impact the industry and result in a further decline in oil prices.