All eyes on OPEC

Oil

The OPEC+ cartel will make the most important decision in terms of oil supply today. So far, the narrative is that all players agree that we have tenacious recovery in the global economy, and a lot of this is chiefly due to the coronavirus vaccination process. The economic recovery will continue from here onwards, which means more strong demand for oil. Therefore, this could be the best time for the cartel to unleash extra oil supply on the market.

Most of the market players are expecting from the OPEC+ is 500K bpd, and as long as the actual number is around this, we are not likely to see much downside move in oil prices. This is because oil traders have largely priced in this number. However, if we see that the OPEC committee has a more bullish view on the oil demand curve and releases more supply on the market, oil traders may react harshly to that outcome. We could see Brent and Crude oil prices trading sharply lower if the OPEC+ releases more supply.

In terms of technical analysis, both Brent and Crude prices are in a strong upward trend, and their prices are trading well above their 50, 100, and 200-day simple moving averages. This confirms that bulls are in strong control of the price and even if there is a sell-off, traders are likely to consider that as a blessing in the sky. For them, that could be an opportunity to load more bullish bets in their portfolios.