Now this is something to wake up to. OPEC members mainly Saudi Arabia and its nemesis Iran bickering over oil production. Saudi Arabia is demanding that Iran and Iraq participate in the reduction scheme whereas Iran is not agreeable and retorted that Saudi Arabia had benefited the most when Iran, Libya and Nigeria were frozen out of the market during the embargo. So if there is any cut, it should be the Saudi’s so that Iran could start to profit from its lost years. So how ugly would this get. Probably it would boil up to Saudi and Iran sending its representative and buy a slot at UFC for a main event slot… (Am getting carried away)….
ANyway… Saudi Arabia oil output has surged to nearly 10.5 million barrels per day as the Saudis supposedly threatened to unleash even more production and exports, if there was no OPEC deal. There is precedent for Saudi Arabia to sink the oil market, in an effort to get other producers to come to heel. Besides the current iteration, back in 1998-1999, the Saudis flooded the market with supply to push back against Venezuela’s adventurism in the oil market, and prices fell to around $10 per barrel. So lets wait till Wednesday afternoon to see the outcome.
From the chart the blue box is an area to monitor for first sign of weakness whereas free fall would happen when 43.60 is broken. Prices would retest low’s of 26.00 if 36.88 support is broken.