Brent crude oil this week, after a moderate correction to $ 47, continues to grow, reaching $ 49.5 per barrel. Black gold quotes are supported by positive news from OPEC +. Thus, the member countries of the organization agreed to increase production volumes at the beginning of 2021 at a more moderate pace. It was originally planned to reduce the volume of oil production cuts by the countries participating in the agreement from the current 7.7 million to 5.8 million barrels per day from the current year, which would mean an increase in current production capacity by 1.9 million barrels per day. However, from January 1, the increase in production will amount to only 0.5 million barrels per day, as a result of which the volume of production reduction will decrease not to 5.8 million barrels per day, but to 7.2 million barrels per day. That is, by 25% of the volumes planned before the second wave of COVID-19. The agreement was a compromise designed to prevent a split between the parties to the deal.
Meanwhile, it became known that Russia is ready to support the planned production growth in OPEC +. Moscow shares the position of the UAE on returning to the original agreements. Kazakhstan also supported the consensus in the OPEC + agreement. For Kazakhstan, the level of liabilities in January 2021 will be 1.417 million bbl / day.
Also, the countries participating in the agreement agreed to hold monthly ministerial meetings, starting in January 2021, to review the current state of the oil market and to adjust the further level of restrictions.
This week, the alignment of the USDKZT rate continued to move towards the lower range amid rising oil prices, which reached $ 49.5 and the growth potential is still preserved. This, in turn, allowed the rate to go below the signal level of 424.25, marking at 420 by today. Thus, we can state the consolidation below the level of 424.25, which now acts as a resistance when trying to grow.
The technical picture signals the pair’s intention to further decline. The breakout of the key level 424.25 took place, and the price confirmed it as a resistance, since a retest and a rebound from the level took place, followed by a continuation of the decline. The pair is currently trading at 420.90. The next target level for the movement is the level of 415.80.
An alternative scenario assumes a breakdown of the resistance at 424.25 and a price return to 431.28.
Arman Beisembayev, Tickmill expert
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