Oil Bulls Enter Troubled Waters as OPEC+ Cool off Prices

At press time, the British-based oil contract, Brent crude futures was down more than 1% as it traded around $72.51 a barrel after already losing about 3% last week.

The West Texas Intermediate Futures also posted similar losses to trade at $70.80 a barrel, having plunged by almost 4% last week.

Bears are clawing on oil prices after Sunday’s meeting revealed OPEC+ ministers agreed to raise oil supply from next month to meet growing demand and avoid overheating the market on the consideration it rose quite quickly to their highest in about two and a half years.

The deal will also give Saudi Arabia Iraq, Kuwait, and Russia, higher baselines against which their production cuts are measured from Q2,2022.

Present chart patterns point Oil bears succeeded in pushing Brent crude bulls below the $73 price levels with further attempts to break below the $72.50 mark, further suggest prices of the black viscous hydrocarbon might face more bearish correction in the mid-term basis, noting that the next station would be around $71 a barrel.

However, some market commentators, disregard such a narrative and remain bullish on the outlook for oil amid the recent agreement with summer forecast for Brent crude prices anticipated to reach $80 a barrel.

It’s very unlikely for oil prices to break below $50 a barrel in 2021 after last year’s efforts by OPEC+ in curbing crude oil production by 10 million barrels per day amid plummeted demand triggered by COVID-19, prompting a collapse in prices of West Texas Intermediate futures at one point falling in negative territory.