Oil Price Analysis: Massive move in WTI as JMMC meeting proves pivotal
- WTI is trading 1.76% higher after the JMMC proved to be bullish.
- The market has now pushed through USD 41.00 per barrel.
WIT 4-hour chart
The OPEC+ JMMC panel agreed to extend the compensation period for overproduction till the end of December. This is big news as the market was waiting for the group to taper and for more oil supply to come back to the markets. OPEC is concerned over the impact of second virus wave according to the draft statement.
Looking at the chart it seemed like the price was starting to reverse and make lower highs and lower lows. After the announcement was released the green resistance just above USD 39.00 per barrel was taken out to the upside. Now the market needs to test the previous distribution and the point of control is the blue line at USD 42.50 per barrel.
The trend could now move back in the upward direction. The indicators are now moving higher as this spike continues. The MACD histogram is firmly green and the signal lines have crossed again to the upside. The Relative Strength Index is overbought but there is a small divergence. This suggests there could be a small breather coming up.
It will be interesting to see if the price breaks the blue resistance zone and if it does another high could be made in the medium term. Before that, there is an upward sloping trendline that could provide some resistance. This was broken but as we know trendlines are often retested. For now, the bull market continues.
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Author
Rajan Dhall, MSTA
FX Daily
Rajan Dhall is an experienced market analyst, who has been trading professionally since 2007 managing various funds producing exceptional returns.
