Crude oil yesterday settled up by 2.09% at 6556 as Russia announced plans to reduce oil production next month after the West imposed price caps on the country's oil and oil products. Russia plans to voluntarily reduce oil production by 500,000 barrels per day, or around 5% of output, in March, Deputy Prime Minister Alexander Novak said, following the introduction of Western price caps. The G7 economies, the European Union, and Australia agreed to ban the use of Western-supplied maritime insurance, finance, and brokering for seaborne Russian oil priced above $60 per barrel from Dec. 5 as part of Western sanctions on Moscow over its actions in Ukraine.
"As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the 'price cap'," Novak said in a statement. "In this regard, Russia will voluntarily reduce production by 500,000 barrels per day in March. This will contribute to the restoration of market relations". Goldman Sachs (NYSE: GS ) lowered its Brent 2023 price forecast to $92 a barrel (bbl) from $98/bbl and its 2024 price forecast to $100/bbl from $105/bbl.
Technically market is under fresh buying as the market has witnessed a gain in open interest by 23.3% to settle at 6086 while prices are up 134 rupees, now Crude oil is getting support at 6429 and below the same could see a test of 6302 levels. Resistance is now likely to be seen at 6654, a move above could see prices testing 6752.
# Crude oil trading range for the day is 6302-6752.
# Crude oil prices jumped as Russia announced plans to reduce oil production next month
# Russia plans voluntarily oil output cut of 500,000 bpd in March
# The EU also banned purchases of Russian oil products and set price caps from Feb. 5.
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