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Fundamentals

During Friday's (December 1st) Asian session, WTI crude oil oscillated narrowly, and it is currently trading at 75.8 dollars/bbl. Oil prices surged yesterday in the Asian session after the news about production cuts was published, once touched 79.6. Then, by the end of the meeting, oil prices plummeted more than 5% mainly due to the market's disappointment with the results. Besides, in the first quarter of next year, the total size of the voluntary cuts from OPEC+ will be 2,193,000 bpd, when the Saudis and the Russians, respectively, will reduce production of 1 million barrels and 500,000 barrels. In general, the overall effect was less than the additional 1-2 million bpd of additional production cuts that had been rumored in the market prior to the meeting. However, looking at the numbers, the result of nearly 2.2 million barrels is good and it is also extremely difficult to achieve, especially for Saudi Arabia and Russia. Meanwhile, OPEC+ members are united and show their determination to maintain the stability of the oil prices, which alleviates the recent bearish trend. Although yesterday's oil prices fell back from highs, these were just the gains from the speculations, and the overall result of this meeting is positive! Oil prices may be able to stabilize in the short term, but the final trend will be decided according to the implementation of the countries. Yesterday, our strategy was effective, as we went short when oil prices arrived at the key points 79.5 and 78.5 respectively, taking profits by up to 4 dollars.

Data: The U.S. core PCE price index grew 3.5% slower in October, and the previous growth rate was 3.7%. The initial jobless claims ascended to 218,000 last week, and the continuing jobless claims climbed to 1.927 million as of the week of November 18th.

OPEC+ production cut results: The total size of OPEC+ production cuts was 2.193 million bpd in the first quarter of next year, including Saudi Arabia-1 million, Russia-500,000, Iraq-220,000, UAE-163,000, Kuwait-135,000, Kazakhstan-82,000, Algeria-51,000 and Oman-42,000 barrels. v

Today's focus: No heavy data, and the results of the meeting will be important.

Technical Analysis

After speculations, oil prices appreciated to 79.6 before the announcement of the results. When the production cuts were confirmed, oil prices fell back quickly and once fell to 75.1 line, which resulted in a great loss for investors who chasing up. Nevertheless, yesterday, we caught substantial profits by going short at highs. In the short term, news and speculations may have to come to an end, and WTI crude oil will return to the technical side. Currently, the price is under a short-term oversold pattern and tends to form a golden cross, and a rebound demand will appear in the 1H chart. Furthermore, the MACD forms a golden cross and expands at lows without giving enough space for a plunge. Nonetheless, WTI will be difficult to escape from the oscillating area from 72.5 to 79.5. about the general direction of the space is difficult to fall, but the disk is still difficult to get out of the following chart 72.5-79.5, and investors should buy low and sell high.  

Trading Recommendations

Trading direction: Long

Entry price: 75.000

Target price: 78.500

Stop loss: 74.500

Support: 75.000/73.500

Resistance: 78.500/79.500