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OPEC + exporters did not disappoint – oil on new heights

Bouncing off important local support in the form of the 20-day moving average, oil rebounded sharply in trading on Thursday, hitting an early 2020 high of $ 67.70 a barrel. Brent maintains an upward bias during morning trading today, holding near the upper end of the range. The oil rally looks like a logical reaction to the outcome of the meeting of the OPEC + countries, which decided to leave the current parameters of the deal unchanged, including the voluntary reduction of production by Saudi Arabia above the norm. For traders, the verdict came as a surprise, especially given that rumors circulated in the market ahead of the meeting about a possible increase in production in the light of recent price increases to more than annual highs, but there are now several factors that could send quotes south as soon as exporters will be won back. First, the dollar continues its widespread offensive on renewed bond yields. A rally in the USD is always an obstacle for dollar-denominated commodities. Secondly, at the end of the week, investors on stock exchanges prefer to sell shares, and Wall Street has suffered significant losses over the past two sessions. This, in turn, speaks of risk aversion. In such an environment, it will be difficult for oil to move to new highs, especially since the emotions from the OPEC + decision will soon subside. It is possible that Brent will try to break through to new peaks, but in the end the correction will do its job. The retreat may begin today, amid profit taking ahead of the weekend .____________________ Arseniy Dadashev, Director, Academy of Finance and Investment Management

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