Crude Oil made a strong reversal in June when US WTI crude was trading above $123 and since then the pressure has totally been to the downside, with the global economy heading into a recession. Oil fell to $76 lows on Monday last week, but it has made a strong reversal since then, mostly on the back of a weaker USD.

Now it seems like the bullish trend might continue, as OPEC agreed to cut production by 2 million bpd, after the JMMC recommended a 2 million bpd cut early yesterday. For October—and also in August—the OPEC 10 production target was 26.689 million bpd, with the non-OPEC members of OPEC+ had a collective target of 17.165 million bpd.

But the group as a whole has failed to meet those targets. The actual realized production cut will be smaller than the 2 million bpd quota cut, but estimates are that Saudi Arabia’s output alone—which is currently meeting its production targets—would be cut by more than 500,000 bpd if the 2 million bpd cuts are distributed pro rata.

WTI Crude Oil Daily Chart – The 50 SMA Still Holding As Resistance

The retrace higher is complete as stochastic shows

Since Monday last week, we have seen a strong bullish move but the price is overbought right now on the daily chart. The stochastic indicator is overbought while the 50 SMA (yellow) is acting as resistance at the top. So, Oil traders are trying to decide what to do.

US WTI Crude Oil Live Chart