How OPEC+ Decision Impacts Brent Crude Oil Prices: Analysis and Forecast
Today, Brent crude oil prices experienced a significant drop of up to 5.6%, attributed to multiple factors including OPEC+ increasing output, a weaker US Dollar, and escalating trade tensions. The market is also grappling with concerns about global economic slowdown due to tariffs, adding to the downward pressure on oil prices.
OPEC+ Accelerates Output Hike
OPEC+ countries, including Russia, Saudi Arabia, UAE, and others, have decided to ramp up oil production beyond the initial plan. Instead of adding 135,000 barrels per day in May, they will now increase output by 411,000 barrels per day. This decision comes as part of a gradual reversal of the 2.2 million barrels per day production cut that began earlier this month. Additionally, OPEC+ has extended production cuts of 3.65 million barrels per day until the end of next year to support oil prices.
Market sentiment is now focused on the risk of oversupply, further driving prices down unless there are disruptions in oil supply due to tariffs or sanctions.
Technical Analysis – Brent Crude
From a technical perspective, Brent crude has experienced a sharp decline of 5.5% today, breaking below a key trendline. While the initial outlook seemed positive earlier in the week, fundamental factors such as trade tensions and growth concerns have weighed on prices. The unexpected OPEC+ decision to increase output has added to the bearish sentiment in the market.
As Brent crude retests the trendline, the daily candle close will be crucial in determining potential recovery signals. Immediate support levels are at 69.52, followed by 69.00 and 68.17, while resistance levels are at 71.00, 72.38, and 74.44.
Source: TradingView
Support: 69.52, 69.00, 68.17
Resistance: 71.00, 72.38, 74.44