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Oil Receives an OPEC Boost

By:
Colin First
Updated: Sep 29, 2016, 07:18 UTC

Oil was again the star commodity of the day when it received an unexpected boost late last night. The OPEC meeting was going in Algiers for the past 2

Oil and gas industry.

Oil was again the star commodity of the day when it received an unexpected boost late last night. The OPEC meeting was going in Algiers for the past 2 days and nothing much was expected out of the meeting as the market was led to believe that it was more of a consultative meeting rather than a decisive one. This lulled the market in general and Oil was also seen bobbing up and down, consolidating and not knowing what to do. But then came the suprising announcement of a deal being reached between the producers to cut the Oil production to be between 32.5 and 33 million barrels per day. This surprise announcement gave a big boost to oil price as it was felt that this cut could increase the price of oil by atleast $5-$10 per barrel in the near future. But the details are yet to be worked and this could be a sticking point among the producers as there could be disagreements on who should cut what amount of production. In any case, for now, all seems well with oil and its price jumped to as high as 47.7 and it sits at 47.37 as we write this. 47.7 is the first region of resistance and we are cautiously bullish in this region as there could be a correction of yesterday’s jump. A break of 47.7 could open up the path towards 48.7 which is the range high for the past 3 months and could be a tough nut to crack. For those who favor longs, they can look at 46.2 to load their longs.

OIL Hourly
OIL Hourly

Gold and silver continued to have quiet ranges with gold between our forecasted range of 1317 (which it visited yesterday) and 1330 and silver ranging between 19.4 and 19.00. We expect Gold and silver to continue to range for today with no major news expected today except for the GDP from USA later on. Traders can safely trade the extremes of the range with tight stop losses just beyond the extremes.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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