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“The Brent market broke convincingly through the key $80/bbl level this past Monday and has remained firmly above throughout the trading week,” Rabobank analysts note in their latest Oil Market Outlook report.

Key quotes

“The move higher was triggered by fears of a supply shortage as the November 4th deadline for Iran oil sanctions approaches.”

“Last weekend, the Joint OPEC-non-OPEC Ministerial Monitoring Committee (JMMC) met to discuss the current state of the oil market. The meeting resulted in a commitment towards reaching 100% compliance on the original deal that began in January 2017. If the group succeeds in meeting the 100% compliance target that would imply an increase of 350kbpd from current levels. The market was clearly looking for more assurance of future supply and rallied sharply on this uncertainty.”

“The market seemed to overlook the Saudi energy minister’s explanation for not increasing production at the meeting. He noted that all current demand was being met and any increase in production would likely see those barrels end up in storage. The Saudi minister confirmed that they have 1.5mmbpd of spare capacity at the ready should it be needed. The next official OPEC meeting is scheduled for December 3rd in Vienna.”

Technicals:  $80/bbl has flipped from resistance to support but look for a potential flush if the market gets below there. The 9-day RSI is at 72 suggesting we are overbought in the short term. The upper Bollinger band sits right below $82.”