Crude Oil Forecast: EU Sets Russian Oil Price Cap At $60, OPEC+ Unchanged

Brent Crude Oil (LCOC1) Talking Points

  • $60 per barrel has been set in motion this Monday by G7.
  • OPEC+ decides not to alter output targets.


Brent Crude Oil Fundamental Backdrop

Brent crude oil (BNO) has already seen some significant price action this Monday after OPEC+ met and concluded that production will remain at prior output levels. The decision came in the midst of other fundamental factors including China’s easing of COVID restrictions as well as the EU’s price cap on Russian oil. G7 nations settled on a $60 per barrel figure on seaborne Russian oil and countries who wish to purchase above this threshold can do so without the Western services such as insurance and transport. Russia in turn stated that they would not be accepting of the price cap which could bring into question future supply that may boost the price of crude oil worldwide.

CFTC Brent Crude Oil Positioning:


Source: Refinitiv

CFTC data shown above reveals another decline in long positioning for Brent crude oil but the prospect of supply cuts from Russia has propped up crude oil prices. From a dollar perspective, last week’s better than expected Non-Farm Payrolls (NFP) data has not translated through to this week with the greenback trading marginally weaker as focus shifts to U.S. ISM services PMI numbers (see economic calendar below). Services statistics carries more weight over manufacturing in the U.S. as the economy is more reliant on the services industry.

Economic Calendar


Source: DailyFX economic calendar

Technical Analysis

Brent Crude (LCOc1) Daily Chart -Undated


Chart prepared by Warren Venketas, IG

Daily Brent crude price action reveals a long upper wick at present but the rest of the day will confirm whether this candlestick persists which will bring into consideration the 85.00 support handle. Fundamentally, supply concerns could be pointing to higher prices but markets will remain wary until there is further clarity around Russia’s reaction function.

Key resistance levels:

  • 87.28

Key support levels:

  • 85.00

More By This Author:

Euro Weekly Outlook: EUR/USD At The Dollar’s Mercy, 1.05 Still Key
Australian Dollar Outlook: US Dollar Beat-up Boosts AUD/USD
Keeping Up Dow Rally And Dollar Tumble Momentum May Be Difficult Next Week

Disclosure: See the full disclosure for DailyFX here.

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.