Crude Oil has surged the past two days as OPEC was able to overcome difficulties between Saudi Arabia and Iran and get their agreement in place to reduce crude oil production. Production is set to be reduced from October’s 33.64 million b/d to 32.5 million b/d. This is a cut of just under 1.2 million barrels. OPEC was able to come up with cuts for individual members and allow Iran to freeze production at pre-sanction levels. The Saudi’s are to cut 500,000 barrels.  NOPEC is expected (by OPEC) to cut production by 600,000 barrels. Russia is to cut production by 300,000 barrels (they said they will do it slowly) and Mexico is supposed to cut by 150,000 barrels (they have indicated it isn’t going to happen). There is a verification process in place and the agreement is to begin on January 1st. Traders covered shorts on Wednesday and Thursday with a massive wave of buying and I think went long looking for prices to continue higher. A break above the October 19th high (52.22) could lead to a test of 55.00. Support is at 50.00, 49.36 and 48.46.

 High    51.80      

 Low     48.98

 Last     50.91

Daily Pivots for 12/2/16:           

R2

53.38

R1

52.15

PIVOT

50.56

S1

49.33

S2

47.74

     

                           

                                        

                          
If you are interested in a Managed Futures program for Crude Oil, check out this offering from Walsh Trading:

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For those interested I hold a weekly livestock webinar on Friday, December 2 at 2:30pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.

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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

bdicostanzo@walshtrading.com

www.walshtrading.com

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING.  THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.  WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.