Production Cuts Enough To Push Oil Higher?
Over the weekend we saw the agreements made between Russia and Saudi Arabia to continue the production cuts for another 6-9 months with the later seemingly more palatable for most members.
The question is, are the cuts enough for the market to continue the bull trend in Oil? Since the start of June WTI has been on a tear, from the low 50’s up to (at the time of writing) just below $60 per barrel. We do have the OPEC/OPEC+ meeting today and tomorrow, so it looks like we will get confirmation on the level of the cuts and for how long?
At the open last night the market took the weekends events as positive, but straight into a resistance area of $60, where we look to be stalling now and showing signs of a reversal. I personally think the resistance at $60 is strong enough to keep price capped for the foreseeable. Looking at higher timeframes the next support level for the commodity is seen at $55 a whole $5 away!! Definitely a lot of room to the downside showing great risk to reward as well.
A strong daily closure above $60 would negate the trade....