Last week OPEC and non-OPEC members met in Vienna and agreed on production cut by 1.2mb/d, but the crude oil prices failed to cheer. However, Crude oil prices have found support in the near -term.
We expect crude oil prices to remain volatile into the year-end as the price tagged with the supply concerns.
Even the production cut came above market expectations, the outcome has not supported the price, seems OPEC is losing control of the Oil market. The next ordinary meeting will convene in Vienna, in April 2019.
Brent oil continued to rally overnight, finally closed above 20MA for the first time since early October. Focus now shifted to the last week’s high 63.75$ (double top level). The Brent crude oil briefly touched 63.75$ previous week but failed to settle above, as a result, traced out a double top pattern formation.
The erosion of the 63.75$ is highly encouraging all the more so as the daily volatility tends to increase markedly and as the daily indicators are remaining bullish, hence the price yet to act accordingly
As we have noted a couple of times earlier, there is a technical story which continues to support the prices in the near-term.
It will be interesting if see a decisive upside breakout above 63.75$, in this case, we could see 66.00$ and 70.00$. We continue to favor being long as an expression of technical sound. A weekly close above 63.75$ confirmed the continuation pattern which opens the way towards 70.00$ levels.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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