OPEC held a meeting with Non-OPEC oil producers about production cut, last Saturday 10th Dec, in Vienna. An outcome of output cut was reached for the first time for OPEC and Non-OPEC countries since 2001 to cut oil output.
Non-OPEC countries attended the meeting including Russia, Kazakhstan, Azerbaijan, Malaysia, Mexico, Oman, Bahrain, Bolivia,Brunei, Sudan, South Sudan, and Equatorial Guinea.
Russia, Kazakhstan, Oman, Azerbaijan, and Mexico have agreed to reduce their production by 558,000 barrels a day.
Despite the Baker Hughes US oil rig count released last Friday rose to 498, surpassed the previous figure of 477, hit the highest level since this end of January. After the news of OPEC meeting outcome was released, oil prices surged during the Asian session on Monday 12th Dec.
Brent Crude reached the highest level of 57.59 since 16th July 2015, breaking the mid-term major resistance level at 54.00.
WTI reached the highest level of 55.27 since 6th July 2015, breaking the mid-term major resistance level at 52.00. The level has turned into the near term major support.
On the 4 hourly chart, the 10 SMA crossed over 20 SMA. Suggesting the bullish momentum is strengthening.
The RSI indicator is around 75, be aware of a retracement prior to the next rally.
The resistance level is at 55.00, followed by 55.30.
The support line is at 54.40, followed by 54.00 and 53.60.