OPEC cuts yield! When do we expect a reversal in the price of oil?

Oil has begun to show signs of a reversal, as speculation about larger production cuts from OPEC has managed to overshadow record US yields. On Friday, last week, Baker Hughes announced that the number of oil platforms in North America had reached more than a three-year high, but the concerns of the re-oversupply cartel made its members think about declining production.

On the chart below, we can see how the record values ​​over the past two weeks have proven to be key for sellouts:

Traders are currently focusing on potential cuts in production that can take the price back to close to $70 a barrel.

In that case, are the long position is possible?

Let's look at the WTI-D1 chart:

The price is on key support, formed by a basic diagonal and horizontal, coupled with 61.8% Fibonacci correction of the main trend. 50 and 200SMA are still beaten, but the price is far from them, actually judging by the daily RSI14, this is the sharpest drop in price - Ever! In view of the strong downward momentum and still poorly shaped bottom, it is good to wait for confirmation of the OPEC support and specification area with the volume it is planning to cut. It is then good to position Long. As long as this happens, we must also remember the activated Double Top formation, whose target is not yet reached. Short-term downward impulses for Stop Hunting and better positioning by institutional traders are possible.

Source: Bloomberg Finance L.P.

Charts: Used with permission of Bloomberg Finance L.P.

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