Oil prices looking bullish despite OPEC news
Oil prices have formed a bullish price reversal despite the OPEC+ decision to increase output more than expected
Oil prices have erased early losses and started to renew gains despite news that OPEC (Organisation of Petroleum Exporting Countries) and its allies (OPEC+) will look to increasing production of crude by a greater margin than before. OPEC+ will look to increase output by 648 000 barrels per day in July and again in August this year.
With the European Union now having also made plans to embargo Russian oil this last week, the increase in OPEC+ production seeks to help keep the lost supply in check.
Brent Crude
The price of Brent Crude has now pulled back to support after its recent breakout and rally to a short term high. The pullback looks to be ending with a bullish engulfing candle pattern (circled blue). This suggests a second opportunity for long entry for breakout traders.
$120/barrel becomes the initial upside target from the move, while traders who are long might consider using a close below the reversal low at $112.30/barrel low as a stop loss indication.
WTI Crude
West Texas Intermediate (WTI) oil has followed a similar path to that of its peer Brent Crude. After a recent breakout, the price has pulled back to support at $111.50/barrel.
We are seeing a bullish price reversal forming (circled blue) at this support level. The long term trend remains up, and the short term reversal suggests that this trend may now being continued. $118.70/barrel becomes the initial target from the move. Traders who are long might consider using a close below the reversal low at 110 as a stop loss indication.
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