Brent crude oil prices are near weekly highs due to the positive data publication on US oil reserves and the anticipation of OPEC+ meeting results. According to the US Department of Energy report, within the last week US oil reserves have decreased by 4.85 million barrels. Experts expected a more modest decline of 1.73 million barrels. But the main oil market event of the week is still the OPEC+ meeting, which is being held in Vienna on December 5-6.
Reuters reported that today the meeting will address the issue of additional reduction of production quotas in the amount of 400 thousand barrels per day. This option will be considered at the meeting as the main solution. Russia may oppose this initiative. According to the Russian Minister of Energy, Mr. Novak, in November Russia had fulfilled the conditions for restricting production by only 85%.
Regarding the chart, the horizontal channel 60.00-62.90 still remains relevant. Now the bulls are testing the level of 62.90. In case of a breakdown we can expect the development of an upward movement towards the level of 64.00 and above.
· Resistance levels: 62.90, 64.00, 65.00;
· Support levels: 61.50, 60.00, 58.50.
The main scenario - a correction to 61.50 and the consequential upward movement.
An alternative scenario - a breakdown of resistance at 62.90 and an increase towards 64.00.
The fundamental outlook is moderately positive. Within the daily framework we consider purchases with very moderate risks from the level of 61.50.