Crude Oil prices rise 2% ahead of OPEC+ meeting

Crude oil prices experienced a noteworthy upturn, breaking a four-day downward trend, as market participants anticipated potential production cuts from the OPEC+ alliance. The alliance, comprised of the Organization of the Petroleum Exporting Countries (OPEC) and Russia, is set to convene in an online ministerial meeting tomorrow, Thursday. The discussions will focus on shaping the production policy for 2024 and resolving disagreements over production targets for African oil-producing nations.

Sources within OPEC+ revealed to Reuters on Friday that a compromise is imminent, with an expected announcement of production targets for 2024. Last week's abrupt drop in oil prices was a consequence of the alliance postponing its meeting to address disputes related to production targets for African countries.

Today, market attention is directed towards the forthcoming release of preliminary data on US crude inventories by the American Petroleum Institute. Expectations lean towards a fifth consecutive week of inventory increases.

Conversely, the US dollar experienced a decline to its lowest level in three months following remarks by Federal Reserve member Christopher Waller. His comments hinted at the possibility of interest rate cuts in the coming months if inflation rates show signs of decreasing.

Turning to technical aspects influencing oil movements, crude oil successfully breached the $77.00 resistance level, extending its climb to trade around $77.80. There is a likelihood of continued upward momentum testing the $79.00 resistance level. A breakthrough could contribute to further gains, targeting $80.50 and potentially leading to a test of the $83.00 level.

However, failure to surpass the $79.00 resistance barrier may prompt a retreat, testing the $77.00 support level, which has transformed from resistance into a robust support for oil. A breach below the $77.00 support level could extend the decline to more substantial support levels around $74.00.