WTI Long trend still under fire

Opec's oil production rose in July after Saudi Arabia pumped record volumes to meet increased global demand and the risks posed by controversial Iran-US policy.

Oil production in the kingdom increased by 230,000 barrels per day in July to 10.65 million a day. This, of course, is quite weak from the peak achieved in 2016.

Higher crude oil production by Saudis, along with Nigeria and Iraq, increased total OPEC production by 300,000 barrels per day, offsetting losses from the spiral economic meltdown in Venezuela, Libya's political clashes and the "new old" US sanctions against Iran . In addition, earlier today, it was clear that US oil reserves were surplus again, this time 3.6 million barrels more.

At the June meeting, OPEC agreed that it had reduced supply oversupply and had to restore its output to 100% of its target by the end of 2016.

In other words, fundamentally there is no reason why the upward trend should not fall.

Technically, the price remains in the upward trend, but there are several available signals that are good to look at. After the swallowing bar yesterday, the price was set below the 50-year average, forming the right shoulder of Head & Shoulders. Formation remains still inactive, with the main trend line being Neckline-a on the figure. In terms of indicators, the Commodity Chanel index 50 and 14 pass the key level 0, indicating a change in main traffic. Sell ​​from the current levels would be risky, but the highly probable downward break will boost negativity.

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

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