There is an 18% rally in crude going into this anticipated OPEC meeting. While assisted by some strong drawdowns in US inventories, we clearly need to see the 12 OPEC and 10 non-OPEC countries not just show a cohesive and coordinated plan, but also over-delivery relative to expectations.
We have seen oil getting savaged, although I don’t sit in the camp that we will see a full retest and break of the May lows of $44.00 based on disappointment towards what was delivered today alone. You wouldn’t have even known the collective had agreed to a new nine-month extension if you had looked at price action alone, but there were a number of questions that oil traders were left asking and that was enough to cause a vicious key day reversal into $48.51. If still running long positions, I would want to see $48.35 hold.