Crude prices rise as OPEC production slides
OPEC production cuts look set to continue, with further Brent and WTI price strength expected

Crude prices have broken to a new four-month high this week, with both Brent and WTI breaking through key resistance levels. This raises the likeliness of a bullish phase, with the past month seeing oil largely trade in a consolidation pattern. The fundamental picture for crude remains one which is geared towards OPEC+ and US production, with the recent focus being placed upon whether Saudi Arabia will insist on an extension to the previous production cuts from Organisation of the Petroleum Exporting Countries (OPEC) and their partners. This question will rear its head once more this month, when OPEC meet up once again to decide whether to extend the current cuts. Markets are widely expecting to see the group maintain current levels until their June meeting, yet we are likely to see sensitivity over output levels raised over the coming weeks.
Crucially, we are seeing OPEC maintain their promise to a large extent, with the group posting a fourth month of lower output, with overall production falling to the lowest level since 2015.
On the topic of US output, we have seen investment trail off somewhat, with US rig count falling to the lowest level in a year. US output is certainly more flexible and market orientated than most OPEC members, meaning that rising prices should drive output higher. However, we are yet to see that come to fruition and the focus is instead upon falling OPEC production levels.
Looking at the chart, we can see the clear breakout throughout the $68.53 level in Brent, paving the way for a rally into the 200-day simple moving average (SMA). There is a chance we could soon see a pullback, yet any such move would be perceived as a buying opportunity as long as we do not see the price fall below $65.95.

The four-hour chart highlights this recent breakout, where a break below the breakout level of $68.53 would point towards a retracement phase coming into play. Until then, further upside looks likely from here.

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