The biggest Oil cut in history is made, but the price isn’t reacted positive for now. Here’s my view of the possible move if $20 holds. CANCELED and updated on APril 15.
OPEC+ made a historic agreement and finalized plans on Sunday to steeply cut oil production by a combined 9.7 million barrels per day. Also, the U.S. additional cuts are expected from producers outside the OPEC+ group, which means how they expected total global oil cuts to amount to more than 20 million bpd, or 20 percent of global supply, effective from May 1. That’s how this is The biggest Oil cut in history which is more than four times deeper from the previous record in 2008.
That’s the main part of the agreement, but I don’t want to write about the details of the same, you can find it all over the web. Rather, let’s see how the market and the price has reacted. Hm, it bearly did for now. At the beginning of the day, or at the week opening, Crude Oil jumped at $24,50 which is aprox 4% up from the Friday’s closing, but then sharply in just 15 minutes fell back to $22.00. At the time of my writting, it’s holding at aprox $23.00.
If you take a look at my analysis from April 02. you can see that I have predicted a resistance at the $28/29 and that was precisely. The price couldn’t go higer on that day and also a day after on Friday with high at 29.10. If we take a look at the previous week, the high were at 28.30 at the day of the OPEC+ meeting, which was at Friday April 10.
I always look at the technical chart, no matter the news, because, the oil was slammed in the previous weeks, strongly held down in the hands of the bears. We sow how the price was just, let’s say smoothly retraced in the previous days with hope on the OPEC+ deal. I sow the predictions like “we will see a $40 on the day of the agreement”, but here we are, down of the day for now and that’s the fact, the bears still have control. Ok, I am not so bearish at the moment, but the important levels are here above to watch and to follow. Based on my analysis, there is a long entry chance from $20.00 – $23.00, with possible target at $34.50. SL must be is placed at $18.00 – $19.00 because I see a strong psychological support at $20. If this level $20.00/23.00 fails to hold, I see the price even lower, no matter “the Cut Agreement”. This could be an intraweek trade or maybe even longer, but it will be interesting to follow for sure.
I can’t tell is this 20 million barrel per day cut enough or not, someone says it is, someone it’s not, who will know!? This is simple technical trade, but also based a bit with a fundamental news which came officialy from the OPEC+, US and other countries agreement.
Notice: Always trade with SL!