OPEC+ Kept Output Plan, USOIL Upbeat

  • USOil

OPEC+ Output Plan

The group that has come to be known as OPEC+, which constitutes from OPEC and allies (most notably Russia), has been returning 0.4 million barrels of oil per day to the markets, every month since August.

The group had faced pressure for more generous addition last month, in order to help contain high oil prices and increasing inflation, but resisted these calls and stack to script, leading US President Biden to release oil from the country's strategic reserves last week.

Biden's move had created speculation around how OPEC+ would respond, while Omicron emergence added another level of complication.

Yesterday, oil-producing countries opted not to take up the glove, as the 23rd OPEC and non-OPEC Ministerial Meeting decided "to adjust upward the monthly overall production by 0.4 mb/d for the month of January 2022", as planned. [1]

Furthermore, they noted that they "…continue to monitor the market closely and make immediate adjustments if required" in regards to pandemic developments.

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The commodity initially reacted lower to the news (and preceding reports around it), but quickly rose, mostly due to the group's readiness to act if the Omicron variant dents demand.

USOIL just finished its worst month since pandemic started and the April 2020 collapse, plunging last week, due to news of the Omicron Covid-19 variant.

Yesterday it managed to defend August's lows and the 61.76-58 area from the last analysis and pushes forward since. It now tries to take the 200Day EMA out, which will give it the opportunity to look towards 74.21.74.

Despite that, the pandemic situation is a drag on its upward aspirations and risk for fresh selling pressures remain high. These can lead back towards the November lows (64.41), although larger decline below 61.76-58 will require a catalyst.

Apart from Omicron related news, market participants will be looking forward to the US Dollar's reaction to today's NFPs.

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Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.



Retrieved 12 Aug 2022 https://www.opec.org/opec_web/en/press_room/6736.htm


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