Possible Short opportunity - risky
Updated
The UK Brent seem to have met some resistance from both a horizontal resistance and resistance from downward channel.
There is a OPEC meeting 25th May to see if they should extent the production cut 9 more months for its members. You should not trade before this meeting, but rather see the development after the meeting.
Bullish sentiments:
- The members + Russia are all positive to the cut and I expect little to no resistance on this agreement. This will hopefully result reduction in oilstock and push the price higher.
- OPEC have said that they will do whatever it takes to get the oil prices back up.
Are these points enough?
Bearish points/risk:
- US is not part of OPEC and have increased their production. This have resulted in a counter to the OPEC agreement and we have not seen the reduction in oilstocks as many of us expected.
- Even with the initial OPEC agreement on this production cut, the oil price have not seen the gain most of us expected. It have still been on the 45-55 range. What is so much different this time?
So, if they are able to extend the deal, this might not trigger any big movements to the upside. Might be a little move for a day. But I would expect it to revert and stabalize shortly. If there would be some kind of "hiccup" we could see more risk on the downside. Combined with the technical signals, this might be a good SHORT, but trade with caution on this one!
There is a OPEC meeting 25th May to see if they should extent the production cut 9 more months for its members. You should not trade before this meeting, but rather see the development after the meeting.
Bullish sentiments:
- The members + Russia are all positive to the cut and I expect little to no resistance on this agreement. This will hopefully result reduction in oilstock and push the price higher.
- OPEC have said that they will do whatever it takes to get the oil prices back up.
Are these points enough?
Bearish points/risk:
- US is not part of OPEC and have increased their production. This have resulted in a counter to the OPEC agreement and we have not seen the reduction in oilstocks as many of us expected.
- Even with the initial OPEC agreement on this production cut, the oil price have not seen the gain most of us expected. It have still been on the 45-55 range. What is so much different this time?
So, if they are able to extend the deal, this might not trigger any big movements to the upside. Might be a little move for a day. But I would expect it to revert and stabalize shortly. If there would be some kind of "hiccup" we could see more risk on the downside. Combined with the technical signals, this might be a good SHORT, but trade with caution on this one!
Trade active
This is exactly the reaction I was expecting. The cuts have previously not shown the good signs we were hoping for, and pushing the oil price too high would result in competition from Shale production in US.Took a short now on 53.40 and expecting to take profit around 50-48 area.
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