WTI oil - Rumors about production cuts elevate the priceOver the past few days, rumors about the OPEC production cut started circulating in the market, with some suggesting the cut could be between 1 mil. bpd up to 1.5 mil. bpd. Subsequently, the price of WTI oil rallied above 83 USD.
This development comes in spite of OPEC's inability to reach its own production quotas and might temporarily lift the price of oil. However, at this point, we still remain relatively bearish on oil in the long term, with a price target of 70 USD.
Despite that, we will pay close attention to the rhetoric of OPEC members about future (potential) production cuts. If the cartel proceeds with further cuts on the supply side, then it might force us to abandon our price target. We will update our thoughts soon.
Technical analysis - daily time frame
RSI and Stochastic are bullish. MACD is neutral. DM+ and DM- are bearish. Overall, the daily time frame is bullish.
Illustration 1.01
Illustration 1.01 shows the daily chart of USOIL and simple support/resistance levels.
Technical analysis - weekly time frame
RSI, Stochastic, and MACD are bearish. DM+ and DM- are bearish. Overall, the weekly time frame is bearish.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
