Oil prices fell more than 1.7% on Monday after reports that the first round of OPEC negotiations ended in vain.
In November, OPEC countries announced the need to extend the agreement to limit production to maintain stability in the oil market amid the coronavirus pandemic. But at the end of the month the market situation changed. Oil prices rose markedly after news that three COVID-19 vaccine manufacturers are close to obtaining a license for mass use. Now investors are selling oil on fears that OPEC + countries may increase oil production from January 2021 amid a recovery in prices.
According to available information, non-OPEC countries, Russia and Kazakhstan, are against the extension of the current agreement on limiting production. They insist on the need to increase production quotas from January 1, 2021.
A new round of talks will begin today at 13:00 GMT. Today, all market attention will be focused on this meeting.
On the chart, buyers are holding the price above 44.80 for now, maintaining good chances of continuing the upward movement. But, in case of a breakdown of the level of 44.80, the priority will shift towards the development of a downward movement with the nearest target at 43.50.
· Resistance levels: 45.90, 47.00, 48.40.
· Support levels: 44.80, 43.50, 42.80.
The main scenario is growth in the direction of 47.00.
An alternative scenario is a breakdown of the support at 44.80 and a decline to 43.50.
The current fundamental outlook is moderately negative. We recommend refraining from trading with this instrument today.