WTI crude oil rises to the best levels since early July
Crude oil is higher for the fourth consecutive day as the OPEC decision continues to reverberate.
WTI crude is up 61-cents to $48.86 and has taken a peek over the August high of $48.75 in another sign of a breakout.
In the days after the OPEC decision, many analysts were in denial. Yes, nothing will change until November but it's still bullish in so many ways.
I'll reiterate what I said on Thursday:
Listening to market commentary today, you would think OPEC hadn't done anything at all. Analysts have been lightning quick to dismiss the plan but that's a mistake.
Ultimately, OPEC production might not decrease a huge amount but it will probably decrease and there's a risk it could cut supply further. Russia appears to be on board but most-important is that OPEC is cooperating. Sure, their grand plans might not come to fruition but it's abundantly clear that OPEC is not dead.
Technically, the case is bullish.
The jump yesterday broke out of the wedge/downtrend since June and it has been confirmed by the extension higher today.
There is some resistance around the August high of $48.75 but I don't see it as a huge hurdle. The momentum is clearly to the upside here and the shorts are facing a reality-check.
The OPEC decision is a game-changer in some ways. Technically, all the signs are bullish as well. Yes there are some supply-demand dynamics that will restrain oil but at the moment, the momentum is clearly to the upside and there's no reason to do anything but ride it until it's close to $52.
