WTI Crude Oil Update & Virt Portfolio

After last week OPEC agreement to cut oil production , US Crude oil ( January futures at USD50,60) has tested yesterday once more the « the 2 years key resistance zone of USD 51-52″ (Sept.29th Post) by touching USD 52,50 and reversing thereafter.

The USD 51-52 range resistance becomes even more important as this is the 4th time it is challenged with no sucess.

Many analysts are very skepticals about the success of OPEC production cut agreement . Here one view from O.Investor.com :  « …OPEC production, with caps, is still at a level that contributed to the current supply/demand imbalance and will do nothing to alleviate it, if they even live up to the agreement. Prices may continue to rise into the near term but I think there is more than a 50/50 chance the bottom will fall out sooner or later. »

What to expect from here ? Only a clear break of the USD 52,50 can trigger a sharp move on the upside . Should this happen oil price could reach the USD 60 level in a matter of a few days ; the move should then mirror the quick trip from USD 60 to 52 that took place in July 2015.

Action : No action at current price. I would only buy USO at end of NY session (oil tracker – See Oct.10th and Sept.29th posts) should US Crude oil January future at that time be above the USD 52,50 level. I suspect it might not happen soon but if so the ensuing move up could be dramatic.

Chart below is an update of chart posted on Sept.29th :