Brent barrel beats long-term downtrend line higher

If last month we commented on the positive report for the future of OPEC, in which it estimated an increase of 1.4 million barrels per day for the coming year 2022 by each member of the group, during the sessions of yesterday and today, OPEC and its allies hold a meeting seeking an agreement considering a possible increase in production over the coming months.

Initially, the OPEC + meetings led by Russia and Saudi Arabia appear to show modest growth in production, which could reach 2 million barrels per day between August and December. This meeting is very important because an insufficient agreement or a very modest agreement could damage the price in the short term, cutting the euphoria of the markets before the growth of demand, as this could be insufficient.

After the positive report in June, the price of a barrel of Brent grew by 8.38% over the entire month, causing a stabilization of the price by about $ 75 per barrel.

Technically speaking, if we look at the weekly chart, we can see how during this week the price has managed to overcome its major long downtrend line to the top, so if this boom continues over time, the price could experience a strong upward momentum. that could bring it first to $ 80 a barrel or even to levels close to $ 87.

Conversely, we can observe that the price is trading away from its moving averages and presents a strong overbought in its stochastic indicator, so we must also be careful about a possible correction.

Source: Admiral Markets MetaTrader 5. Weekly brent chart. Data range: 23 November 2014 to 2 July 2021. Prepared on 2 July 2021 at 12:30 pm CEST. Please note that past returns do not guarantee future returns.

Evolution in the last 5 years:

• 2020: -21.52%
• 2019: 22.68%
• 2018: -19.55%
• 2017: 17.69%
• 2016: 52.41%

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