Mish's Market Minute

Skepticism Over the OPEC + Oil Cuts

Mish Schneider

Mish Schneider

Director of Trading Education, MarketGauge.com

Despite the total cuts by all countries added at the November 30th OPEC+ meeting, oil sold off, testing key support. Countries like Angola have threatened not to stick to the new quota, promising to produce above target. Meanwhile, Brazil confirmed it will join OPEC+. That means that some of the pressure by non-OPEC producing countries offsetting the cuts is now somewhat mitigated.

Nonetheless, the question is, once the dust settles, will these 2.2 million barrels a day cuts hurt supply?

Furthermore, in a story by Consumer Reports, they wrote, "EVs are less reliable than conventional vehicles, having nearly 80% more problems and are generally less reliable than cars propelled by conventional internal combustion engines." That could certainly help drive demand towards gas-fueled cars, or at least hybrids.

The real question is though, what does price tell us?

Looking at WTI crude oil, $75 is a great line on the sand for support. $80 is the resistance to clear. The best we can say after today's action is that oil is ranging and trying to figure out its next moves.

The monthly chart, which will change tomorrow (December 1), shows price sitting right on both the 23 and 80-month moving averages. 70.43 in the US Oil Fund ETF USO is a good near-term point to hold to make the case for more upside. We begin December above that level, good. And if USO gets and holds above 73, even better.

With weaker global economic expectations keeping prices under pressure, oil in general seems vulnerable to any wild shift in price and is very much headline dependent.


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Coming Up:

December 3-December 13: Money Show Webinar-at-Sea

December 14: The Final Bar with David Keller, StockCharts TV

December 20: Outlook 2024 with StockCharts

December 22: Yahoo! Finance

December 28: Singapore Breakfast Radio

Weekly: Business First AM, CMC Markets


ETF Summary

  • S&P 500 (SPY): 450 support, 465 resistance.
  • Russell 2000 (IWM): 181 resistance, 177 support.
  • Dow (DIA): 360 resistance, 346 support.
  • Nasdaq (QQQ): 388 now pivotal.
  • Regional Banks (KRE): 45 pivotal.
  • Semiconductors (SMH): 160-161 pivotal support.
  • Transportation (IYT): 235 support, 250 key resistance.
  • Biotechnology (IBB): 120 pivotal.
  • Retail (XRT): 65 resistance.


Mish Schneider

MarketGauge.com

Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More