Brent and WTI crude grades are opening the week with growth due to double support from outcome of G20 summit and OPEC statements.
Bilateral meeting of U.S. and Chinese leaders has resulted in so called ‘back on track’ - the parties agreed to restart trade talks, after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on Huawei in order to curb tensions with Beijing. Such outcome raises investors’ optimism regarding oil demand. This news also provided support to stock markets, that points to growth of demand in dicey assets, that traditionally include crude oil.
On Sunday Saudi Arabia Energy Minister Khalid Al Falih claimed, that OPEC and non-OPEC countries headed by Russia most likely will extend production cuts agreement for nine months, that will reduce supply level on the market and will facilitate growth of the oil prices. Let’s remind, that meeting of OPEC+ countries will be held on July 1-2 in Vienna. Iran opposes the decision on production cuts and has criticized the agreement between Saudi Arabia and Russia claiming that partnership of Saudis with non-OPEC countries brings jeopardy to oil cartel existence. But the majority of experts suppose, that Iran is hardly capable to influence the general decision of the cartel.
On the chart the price resumed upward movement after correction and broke resistance at 66.00. It’s a nice bullish signal, that opens new prospects for growth of oil price towards 68.80 and higher.
Resistance levels: 67.30, 68.80, 72.50;
Support levels: 64.65, 63.30, 61.00.
Main scenario: Stabilizing above 66.00 and continuation of upward movement.
Alternative scenario: False break of 66.00 and decline towards 63.30.
Positive bias prevails on the market locally, but outcome of OPEC meeting can trigger strong price fluctuations on the market, therefore we recommend to withhold from trading this asset in the coming days.