WTI is trading sub the $49 handle at the time of writing with spot at 44.95 from a high of 51.67 and a low of 48.41.
WTI is jittery and on the backfoot with bears in charge due to the Organization of the Petroleum Exporting Countries’ decision to extend production cuts by nine months. Traders were caught off guard, expecting the cartel to make deeper cuts to output or perhaps just keep the agreement in place for another year. This is a classic case of buy the rumour, sell the fact price action after a spell of sideways tight channel trading of recent sessions where key MA’s were converging on the daily charts. When OPEC made their intentions known, there was nowhere left for prices to go but lower and stops were triggered.
OPEC and today’s key news on Oil:
WTI oil is now below both the 50 and 200-day moving averages at 50- $49.59 a barrel and $49.55 respectively. Next target to the downside is a break of the 48.41 lows and 18th May low at 47.93. To the upside, a recovery above the 20 and 200 sma converging on the 4hr chart would be putting the gears back into neutral.