Brent Oil: Short-term target lowered to $78 despite OPEC+ deal – ANZ


The OPEC+ alliance finally reached agreement on increased output levels in a hastily convened meeting over the weekend. The deal allows for monthly hikes in supply of 400kb/d over the course of the new agreement. Subsequently, strategists at ANZ Bank pulled back their short term target for Brent to $78/bbl.

New OPEC deal to provide some stability

“The new agreement allows for the 400kb/d increase to start in August 2021 until phasing out the 5.8mb/d production adjustment. The alliance will continue to hold monthly meetings at which it can adjust production according to market fundamentals.”

“The new agreement is likely to see prices come under pressure in the short term, as investors unwind positions on the prospects of higher supply in coming months. However, even with higher output, the market remains relatively tight.”

“OPEC’s ability to reach an agreement should dispel concerns that the alliance is at risk of breaking up. Its monthly reviews of the agreement should allow it to make adjustments should fundamentals shift. This will provide some stability to the market over the coming months. Nevertheless, the likelihood of prices surging higher over the next month or two has diminished. As such, we are pulling back our short term (0-3 month) target for Brent crude to $78/bbl.”

 

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD remains below 1.1750 on dismal German IFO, risk-off mood

EUR/USD is holding steady below 1.1750 after German IFO surprised to the downside. Hawkish Fed, Evergande risks amid stimulus hopes keep investors wary. The US dollar attempts a bounce amid a cautious mood, firmer Treasury yields. Powell’s speech awaited.

EUR/USD News

GBP/USD battles 1.3700 amid risk-aversion

GBP/USD is battling 1.3700, as the US dollar holds its bonce amid worsening market mood. The pound reverses hawkish BOE-led gains, as Brexit woes and China Evergrande uncertainty weigh. Focus shifts to Powell's speech. 

GBP/USD News

XAU/USD clings to gains above $1,750, upside seems limited

Gold gained some positive traction on the last trading day of the week and recovered a part of the overnight slump to the lowest level since August 11.

Gold News

Axie Infinity nears the end of bearish outlook as AXS contemplates 25% gains

A brief technical and on-chain analysis on Axie Infinity price. Here, FXStreet's analysts evaluate how AXS behaves as it trades above key support.

Read more

German Elections Preview: Three EUR/USD scenarios for the post-Merkel dawn

Who will succeed Angela Merkel at the helm of Europe's largest economy? The long-serving beacon of stability is stepping down as Germany's Chancellor after 16 years, and her big shoes leave a hole in the old continent's leadership. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures