As the chart demonstrates, we have double topped on Brent (UKOil) and after last week's massive selloff, we have retested the downtrend. The move up today was nothing but a short squeeze from last week's selloff. Once the neck line/immediate support is broken, the price will fall.
Saudi Arabia and Russia have both agreed to increase production to compensate for Iran's lost market share. OPEC also does not want the price of oil to move too high too fast and become parabolic. This happened in the latter half of 2007 which was followed by the largest selloff in Oil futures in history.
Moreover, a strong dollar coupled with high energy prices could further negatively impact Emerging Markets so OPEC will be keen to keep the price lower in the mid-term.
Saudi Arabia and Russia have both agreed to increase production to compensate for Iran's lost market share. OPEC also does not want the price of oil to move too high too fast and become parabolic. This happened in the latter half of 2007 which was followed by the largest selloff in Oil futures in history.
Moreover, a strong dollar coupled with high energy prices could further negatively impact Emerging Markets so OPEC will be keen to keep the price lower in the mid-term.
Trade active:
The breakdown is coming along nicely. Once the support is broken at $75 region, it will head to the first TP region of $72-$72.50
Trade active:
$75 region is now broken and looks to have become resistance. On a larger scale, this has room move to further down maybe even as low as $60 before OPEC meets later this month. Very much a case of the "sell the rumor, buy the fact" situation.