OPEC has agreed to a nine-month extension to output cuts as oil traders widely expected. As we approaching the end of the meeting and discussions in Vienna, traders dump crude oil sending the black gold down over 3 percent at $57.19 per barrel. There is a possibility a fund or a big institution was betting for further cuts, disappointed and closes the long positions. The leg lower looks very strong and it will test the immediate support at $57.
As I have mention earlier the bullish momentum in oil price remains as the price holds the June 21 low of $56.62. I expect first resistance for the black gold at 59.43 today high, while next resistance stands at 61.30 the high from May 23rd. On the downside immediate support stands at 56.22 the 150 day moving average and if the price breaks below, the selloff will intensify and we might test the 20 day moving average at 55.37.Don’t miss a beat! Follow us on Twitter.