In the red are now the relations between the world's largest energy poles, after reducing the daily oil production by 2 million barrels as OPEC decided, adding a new ‘’headache’’ to Europe's energy security. That decision surprised all the analysts who expected a reduction of 1 million barrels. Simultaneously, with the prices of natural gas being very expensive due to Russia’s pipelines, they took advantage to sell their liquified natural gas.
OPEC decided in its first one-on-one meeting since 2020 to cut production by up to 2 million barrels per day from November. Oil prices have fallen to around $90 a barrel from $120 in early June, amid growing fears of the prospect of a global economic recession. However, still not knowing how long will it last and with what intensity, predictions are useless for now.
On the other side of the Atlantic, the US opposes such a move, as OPEC keeps oil prices high, resulting in inflationary pressures on consumers and production costs. More specifically, President Biden is disappointed by OPEC's short-sighted decision to reduce production quotas while the global economy deals with the continuing negative effects of Putin's invasion of Ukraine. At a time when maintaining global energy, supplies are of the most importance, this decision will have the most negative impact on low- and middle-income countries that are already struggling with high energy prices. President's work has helped lower gas prices in the US. At Biden's direction, the Energy Department will release another 10 million barrels from the Strategic Petroleum Reserve into the market next month, continuing the historic releases the President ordered in March.
From an Elliot wave perspective, we will examine the Crude Oil chart to see the possible move shortly.
Looking at the weekly chart, we see an upward move from $15.98 very strong one. Ideally it’s the V wave that will probably reach $147.02, since we see drop from $139.00 in three waves now at key support with subwave C. A break above the trendline resistance can cause acceleration higher.
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