Brent rises ahead of OPEC meet, output rise discounted

Brent oil rose on Friday after witnessing three consecutive red days as Russia and Saudi Arabia called for an increase in the output. The outcome of the meet has been discounted and Brent rose on Friday expecting a output hike by OPEC in the meeting scheduled later during the day. Brent oil surged nearly 1 per cent from its previous close, hitting a high of US$ 74.21/barrel. Saudi Arabia is said to have confirmed Board approval to raise output by 1 million barrels/day. However, Iran seems not ready to compromise, without whom the capacity cannot be increased to the said level.

Technically, Brent oil is seen falling making lower tops and lower bottoms, since its Double top pattern on May 17 and 22, 2018 near US$80.50 levels. On June 14, Brent also breached its upward sloping trendline level which is also a neckline of Head & Shoulders pattern at 76.20 on the downside. The very next day, Brent witnessed a very sharp fall of 3 per cent on a single day from its previous close. On June 18, Brent attempted a bounce which was washed off in the next three trading sessions.

Going forward, the OPEC meeting would drive the movement and hence if it continues to surge further, we hold 75.85 followed by 77 as the resistances for now. On the downside, 72.45 will act as a strong support which is its current Double bottom level, whereas 70.80 is the next support zone.