OPEC + countries decided to increase production by 648vvvvvvv

On Thursday, June 2, oil trading ended with growth. A barrel of Brent rose 2.10% to $118.21. During the day the market showed mixed dynamics. In the first half of the day, the oil industry was under pressure due to the news that Saudi Arabia is ready to increase oil production in order to compensate for Russian oil on the market. Before the announcement of the OPEC+ decision, a barrel of Brent cost $112.45. When there were rumors that production could be increased by 500-700 thousand barrels per day, the price rose to $115. Buyers were not afraid of such values. OPEC+ JMMC later recommended that the alliance increase production by 648,000 barrels per day in July. The price in response rose to $115.68 per barrel.

As a result of the meeting, the OPEC + countries decided to increase production by 648 thousand barrels per day for July. The volume turned out to be higher than expected, while the market still reacted positively to the alliance's decision. The important news here is that Russia has remained in the deal and we should not expect destabilization of the oil market in the near future. The issue of exclusion of Russia was not even discussed at the meeting.

Oil inventories for the week ended May 27 fell by 5.1 million barrels to 414.7 million barrels (the forecast was -1.35 million barrels). Gasoline inventories in the United States decreased by 0.7 million over the week, to 219 million barrels (the forecast was +0.53 million barrels). Distillate inventories fell by 0.5 million barrels to 106.4 million barrels (+1 million barrels was forecast).

On Friday, June 3, at auction in Asia, Brent oil costs 117.48 per barrel. The bullish trend in oil continues. Buyers control the market, counting on the ongoing imbalance between supply and demand for the month of June. There is an opinion that they will try to return to the level of 121 next week.

There are two price levels of $112 and $107 a barrel that buyers need to protect. The latter is key from a technical point of view. If it does not hold, then buyers will begin to actively close long positions. That's when we can already talk about a stronger fall in prices below 100 as part of the correction.