Technical Analysis

Oil stays relatively upbeat awaiting OPEC+ decision

Oil up 0.3% to $75.40 levels currently

As much as there is a delay to the OPEC+ decision, oil bulls aren’t overly worried as the main sticking point there is the UAE wanting to increase its baseline output.

Sure, they are blocking a deal/proposal for a 400k bpd increase in output per month starting from August, but they aren’t doing so because they are solely against that idea in particular, it’s more of a bargaining chip.

Once this dispute gets settled, oil can keep focusing on the improving macro backdrop and the view that demand conditions are to keep more robust going into 2H 2021.

The only thing I fear for oil is from a technical perspective as the rise this year has not really paused for too long – including the latest run since late May.

Price is now closing in on the 2018 highs near $75.24 to $76.88 and that may very keep a lid on gains and offer some room for profit-taking. But rest assured, as long as the current outlook remains, oil will stay as a buy-on-dips with relatively strong conviction.
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