Headline risk has returned with a vengeance in the Oil market.
For the better part of August, various comments by Oil producers in general, and Saudi Arabia in particular, about a production ceiling, or even a cut, at the upcoming September OPEC Meeting have underpinned the price advance from $39.19 (Aug 03) to $48.75 (Aug 19).
This morning’s headline risk reared its head again, with a Reuters story indicating that Iran is sending signals to OPEC that it also will join other Members in an effort to boost prices.
In reaction to the story, Oil immediately pivoted to the upside into a 3.6% spike from $46.60 to $48.30.
The sharp upside reversal has the right look of the end of a pullback from $48.75 to $46.49, and the start of a new upleg within the still-dominant advance from the Aug low at $39.19.
If accurate, then this upleg should propel Oil to retest key resistance at $50.00 to the June high at $51.57-- in route to $58.00-$60.00 thereafter.