Brent crude oil prices climbed above 74 USD per barrel following OPEC+'s announcement to delay its production increase originally scheduled for December. This decision marks the second postponement by OPEC+ amid persistent global economic challenges and aims to avoid potential market oversupply.
Demand prospects remain subdued with Europe's slow economic recovery and Asia's lacklustre performance, particularly in China despite recent stimulus efforts. Additionally, tensions in the Middle East, particularly Iran's continued threats against Israel, are providing strong support to oil prices, with potential escalations anticipated post-US presidential elections on 5 November.
Concerns that regional oil production facilities might be targeted in these attacks contribute to fears of disrupted supply, further buoying oil prices. Meanwhile, temporary weakness in the US dollar also increases oil prices.
Technical analysis of Brent
Brent crude oil prices have rebounded from a recent low of 70.55 and are upward towards 76.16. The market is consolidating around 73.22, with a potential breakout that could lead to the 76.16 level. Once this target is achieved, a pullback to 73.22 could occur before further gains towards 79.20 are pursued. This bullish scenario is supported by MACD indicators suggesting upward momentum.
Following a correction to 73.22, Brent is poised to ascend to 74.90. A successful breach of this level could pave the way to 76.16. The stochastic oscillator's position above 50, pointing upwards towards 80, corroborates this potential upward movement.
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