Oil gained nearly 15% this week to close at $54, one of its biggest weekly rallies since 2009. Price broke a key resistance level of $53.73 to begin a new uptrend after oil ministers confirmed that OPEC has reached a deal to tackle oil glut.

Some of the factors driving crude oil price:

OPEC-Russia deal to cut output by 1.5 million barrel per day (with Russian restricting her daily quota by 300,000 per barrel by next year). Oil jumped by 9% after the announcement on Wednesday.
The recent decision by the President-elect Donald Trump team to examine the proposal on a new non-nuclear sanction on Iran could send oil price to an another key level.
Oil Price Analysis:

Technically, the current market trend is up as seen on the higher highs, and higher lows formed on the daily chart. The first high (10/10/2016) was at $53.73, the second higher high (3/12/2016) at $54 while first low was 14/11/2016 at $44, and second higher low (29/11/2016) was at $45.96.


A further move to the north side is likely as long as crude oil price is above $50 psychological level, but not without a downside risk if you factor in the recent market supply.

“Global and US oil inventories are still at extremely high levels after two years of massive oversupply,” Societe Generale analysts said.
The production data coming out from Russia showed a rise to a new high in November (post-Soviet level) which is another reason there may be a limited upside (at least in the short term)
The full effect of the new OPEC deal, that’s if the member and non-member countries comply, as some analyst believe, will materialise at the end of first half 2017.

Next week, crude oil may slip (as investors look to take profit from initial rally) back to the resistance-turned-support level.

Oil price is not facing any resistance right now, as OPEC announcement dissipates, investors should follow emerging non-nuclear sanctions proposal and extension of Iran sanctions keenly.

Disclaimer: Analysis posted here are the opinion of the author and shouldn’t be taken as a basis for an investment decision. We are not liable for any loss or profit earned.

Source: http://oilandnairanews.com/oil-price-analysis-forecast-5th-9th-dec-2016/

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