OPEC decided on Wednesday to reduce production by 2.2 million barrels a day in an effort to stop the trend of falling oil prices.
The aim of the move is to bring oil back to $70 to $80 per barrel. However oil price did not rally based on the decision. It was a typical buy on rumour sell on news trade.
The contract for New York's light sweet crude for delivery in January expired at 33.87 dollars a barrel, down 2.35 dollars from its Thursday close.
The contract dived to an intraday low of 32.40 dollars, a level last seen on February 9, 2004.
The New York contract for delivery in February, which becomes the market reference beginning Monday, finished 69 cents higher at 42.36 dollar.
Oil is still deep “Bearish” phase based on the phase chart of USO. It has stayed in “bearish” phase since 1 Oct 08. So sticking to the trend will mean that we should not be buying oil at this price level.
No comments:
Post a Comment