Oil prices are presently seeing a retracement after taking a massive hit when news of the Omicron variant entered the marketplace. Investors were concerned about the future of oil consumption, which might have decreased if the illnesses had been fatal. However, this is not the case, as seen by the 8 percent increase in oil prices last week.
Moving forward, the release of crude oil from American strategic reserves and the policy followed by OPEC+ in the next months are anticipated to be the key drivers of oil prices. According to sources, the United States is planning to release 18 million barrels on Dec. 17, while OPEC+ is anticipated to continue to its original plan of gradually increasing monthly oil output by 400,000 barrels per day.
In terms of price level, crude oil prices continue to trade above the $70 price which is critical as it shows that oil traders are still very much bullish. As long as the price continues to trade above the $70 price, we are highly likely to see more higher highs and lower highs for the price. The next meaningful resistance for the crude oil price is shown on the chart below.
