Oil markets performing well but pull back from best levels

Published date: 04/12/2018
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Oil markets today are digesting comments from the OPEC+ meeting where Saudi Arabia's Al Falih has stated that OPEC are looking to cut production by at least 1.3mln bpd. This produced a sharp reaction to send spot WTI to $54.54/bbl but since the original reports, some OPEC delegates have come out to say that no deal has been reached as of yet. It seems the stumbling block is how much slack Russia are prepared to take. Some sources are suggesting that they are not willing to contribute to cuts as much as the Saudi's but this is unconfirmed. 

Technically speaking the prices are still working their way back from very depressed levels. The low of $49.44/lb seems a distant memory but it was only on Oct 29th. Clearly, the greenback has much to do with this story and it has contributed to by pulling away from best levels but until the production cut is confirmed it seems that we may have reached a high. 

On the 4HR chart, we hit a serious bit of divergence prior to the price rise which indicated that momentum on the downside was slowing down. Although today, we now have a bit of hidden divergence where the RSI has made a wave higher but the RSI indicator is heading toward oversold levels above 50. A catalyst for a move lower could be any indication that OPEC+ cannot agree on a deal in which case spot WTI could move lower and confirm the RSI signal. 

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