OPEC has agreed to a nine-month extension to output cuts as oil traders widely expected. Today as the discussions continues in Vienna, Russia and President Putin has approved the nine month extension and are ready to sign the agreement. The agreed nine-month extension is to prevent 100M barrels build-up and all countries have agreed to improve the compliance on cuts. OPEC has agreed on draft cooperation charter with OPEC+ and they are working on which inventory metric to be used in the agreed charter.
Crude oil price is trading lower, giving up 0.10 percent at 59.10 as the deal has already discounted in the price. 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.