Is there anything stopping this oil move?
There seems to be no stopping Oil gushing higher in the past two weeks, having risen just over 6.5%, charging its way to the next resistance level seen at $60.00 per barrel. This is thanks to demand growth and supply outages, the perfect storm of supply and demand.
The Joint Ministerial Monitoring Committee (JMMC) met in Baku this week for its 13th meeting on March 18th. Within the meeting, participating countries individually and collectively, assured the Committee that they will exceed their voluntary production adjustments over the coming months. At the end of the meeting, and as fundamentals are unlikely to change in the next two months, the JMMC adopted a recommendation to forego the full Ministerial meeting in April and schedule a JMMC meeting in May, ahead of the OPEC conference. They are skipping the meeting as it would be too early to assess the actual impact on the sanctions on Venezuela, and US policy on the waivers for Iranian oil customers. Although it has been touted that a decision will not be made in the next meeting, we will always be on the lookout for an extension to production cuts.
Oil prices at or around $65-$70 are seen as the sweet spot for OPEC and U.S. producers, however, $65 and above brings a rampage of tweets from President Trump. I think OPEC and producers care about their own pockets more however, over Trump and his bashing tweets.
Looking at the 4-hour chart below, WTI is looking very overextended, it has formed a lovely rising wedge, making our way to our next resistance level at $60.00. I would like to see a push up to this area, see some deceleration / bearish candlestick formation and a turn back lower to our next support region at $57.50 - $57.00. A break and daily close above our resistance zone of $60/$60.50 would invalidate this trade, and we would expect further upside on this commodity.