The price of crude oil is currently consolidating in a very tight range, following the establishment of a recent upswing, during the second day of OPEC's 180th conference.
The preliminary market expectations regarding the likely outcome of the conference are so far being realised, in that the members of the conference took note of the mixed global trends towards recovery that have been observed recently.
In the opening statement that was released yesterday after the conclusion of the first part of the conference, it was remarked that:
"The global economy is still in deep recession with growth pegged at minus 4.3% for 2020. Global oil demand for 2020 is expected to decline by around 9.8 mb/d as the second wave of the pandemic and related lockdowns put a damper on demand. Markets have reacted positively in recent days, as various pharmaceutical companies have made positive strides in the development and approval of a safe and effective COVID-19 vaccine. However, it is clear that a global deployment of vaccines will take time, and its effect will likely begin to be significantly apparent in the second half of 2021."
Markets are eagerly anticipating the end of today for another press release, as investors and traders would be looking for strong indications that OPEC and its partnering countries from OPEC+ would continue to abide by the Declaration of Cooperation (DoC) agreements.
Essentially, the recent calmness on the global energy markets can only be preserved if it is revealed that the partners continue to work towards recalibrating the underlying supply and demand equilibrium in the market by cutting aggregate production.
Meanwhile, crude oil's price action continues to be underpinned by a considerable bullish sentiment, as is demonstrated by the Ichimoku Cloud indicator on the 4H chart below.
The price action has been consolidating in a narrow range over the last few hours, as market participants weigh in on the likely impact of the conference, while the market prepares for the highly probable continuation of the bullish rally.
This temporary break in the advancement further north is underlined by the MACD indicator, which is currently demonstrating the waning bullish momentum on its histogram. This is more likely to be an intermediate stage in the development of the broader trend as opposed to a decisive trend reversal.