Four days later, there has been no new reports of said production cut proposal, but something interesting has been reported by Charles Kennedy at Oilprice.com - "UAE Offers India Free Oil To Ease Storage Woes."
There is still no reason why OPEC would cut production now given the distress its tactics are already causing in the U.S. shale space. To cave in now, OPEC's squeeze on U.S. shale would be a failure and U.S. shale would be a beneficiary.
The same UAE that sparked the latest crude short-squeeze has so much oil , it's bribing India with free oil in order to access a underground Indian storage facility to park abundant reserves. Go figure.
Despite OPEC's true unwillingness to cut production, the technical outlook for Brent could prove positive unless risk sentiment is turned off.
Currently testing price resistance at $33.81, Brent crude has found support at two key weekly support levels: $27.83 and $31.59. The is showing a lack of momentum in the current move, but +/- DMI could, potentially, have a convergence.
The growing tensions between Saudi, Turkey and Syria could reignite risk premium, but many analysts have suggest that any substantial premium is unlikely due to the current supply glut. Even so, resistance at the 50-day coincides with a minor downtrend.
However, a break north could test $38.46 to $40.34. If price breaks down, Brent could easily retest $27.83, while more talk of not cutting production would send the international benchmark to $22.98.
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