Brent oil recovers from 15-month lows on reports OPEC is planning deeper output cuts
|- Brent is currently trading at $55 per barrel, having hit a 15-month low of $54.24 yesterday.
- The recovery is likely associated with reports stating that OPEC is planning deeper cuts to shore up prices.
Brent oil has regained some poise, having tumbled 5 percent in the last session.
As of writing, the front-month contract is trading at $55 per barrel. Prices hit a low of $54.24 yesterday - a level last seen on Sept. 13, 2017.
Oil seems to have picked up a bid on reports that the Organization of the Petroleum Exporting Countries (OPEC) is planning deeper output cuts. OPEC's Secretary General Mohammad Barkindo on Thursday said that the cartel is planning to release a table detailing output cut quotas for its members and allies such as Russia.
Barkindo said to reach the proposed cut of 1.2 million barrels per day (bpd), the effective reduction for member countries would need to be 3.02 percent. That is higher than the initially discussed 2.5 percent discussed earlier this month, according to Reuters.
That, however, is unlikely to produce a move strong enough to invalidate the bearish setup, as indicated by the bear flag breakdown on the daily chart and the rising wedge breakdown in the monthly chart indicates the path of least resistance is to the downside. Moreover, the concerns of oversupply, slowing global economy and record US production could continue to put downward pressure on prices.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.