Uncertainty has prevailed on the oil market for the last four weeks. On the one hand, OPEC gives optimistic forecasts about achieving a balance on the market in the first half of 2018. In addition, it became known that in November OPEC members chose renew an agreement to reduce oil extraction by 115%, while countries outside the cartel which joined the deal reduced oil production by 96%, according to the agreement.
At the same time, the USA is increasing its volumes of oil extraction. Since the middle of 2016 oil production in the United States has grown by 15%. According to a long-term forecast of the International Energy Agency (IEA), by 2025 the level of production of raw materials in the US will have grown to 80 percent of the global volumes of oil production. The IEA supposes that volumes of oil on the market will be increasing more than the demand for oil in 2018.
Before the end of November the rates were held in the frames of a rapid upward trend. However, it is likely that on November 27 when prices reached the level of $59 per barrel CL/WTIwas the price's peak. Afterwards the price of oil began to form a new downtrend. The resistance line has already changed its direction, while the support line is still pointing up, according to the old upward trend. However, on the market there are no incentives for the further growth of oil prices. The stochastic oscillator indicates an overbought zone. Therefore, short deals will be the most optimal in this situation.
