OPEC meeting concluded to an extension of the oil production cuts as expected though oil prices dived while USD/CAD soared. Greenback covered its losses after solid job data while sterling edged lower after a poll showed that conservative party is weakening, almost two weeks before the election.
OPEC Extended Cuts As Expected & Oil Dived
As expected, OPEC countries agreed to extend the production cuts for nine more months, until next March but the oil prices plunged almost $3.00 a barrel in a single day, on Thursday. The fall is attributed to the disappointment of traders, as they were hoping for deeper cuts.
Saudi Oil Minister Khalid Al-Falih said at the start of the group's meeting in Vienna that extending the output cuts for this period is "very safe and almost certain option to do the trick". He also added that the glut will be "balanced earlier than later". Nigerian Oil Minister Emmanuel Kachikwu stated that the decision taken would bring price stability and suggests a "USD 50 floor" for oil.
Brent Crude Oil– Technical Outlook
The Brent Crude oil had an extremely unexpected bearish fall yesterday while it plummeted more than 7% since Thursday’s session and posted a nine-day low at $51.18. After the upward run in the previous days, the crude oil will hit again the medium-term rising trend line that is holding from April of 2016. The next level to watch is the $49.50 diagonal line, or moreover the $46.70 strong support handle.
On the daily chart, the technical indicators lost its strong upward momentum and are currently moving slightly lower. The MACD oscillator is falling within the positive path whilst the Relative Strength Index (RSI) slipped below its mid-level after the bounce off in the bullish area. Additionally, the price is developing beneath the three simple moving averages (50, 100 and 200) indicating declining movement.
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