Crude oil was higher by 0.75% on Tuesday as OPEC entered the second day of talks to decide on their course of action with supply cuts. W.T.I. crude was finding buyers at the $45 level and an OPEC extension could propel the commodity towards $50 in December.
No agreement was made on Monday about whether to continue with the current supply cuts but markets are expecting a three-month extension. It was also reported that Saudi Arabia is considering resigning from its role as co-chair of the group’s Joint Ministerial Monitoring Committee. The Kingdom shares this role with Russia and it may suggest that there is a disagreement between the two nations.
Bloomberg reported yesterday that a large short position had been built up in Brent crude and this could see a short squeeze into year-end if oil rallies on the OPEC announcement. Traders marked as “other reportables“ by regulators and exchanges now hold a record short of nearly 470k Brent futures contracts, according to ICE data.
Crude Oil Technical Outlook
After rallying through the $63.50 resistance level, oil is now finding support at $45.00. This is the key level for the OPEC meeting and will decide whether we see $40 or 50 in December. If we go higher then a short squeeze is possible. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
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Crude Oil Daily Chart
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