03.05.201701:49:00UTC+00Fxwirepro: Oil Tests Trend Line; Possible Sell Breakout Ahead

Investors have pushed the oil price lower over concerns that there could be hindrances to the extension of the OPEC deal when producing members meet in the OPEC headquarter in Vienna on 23rd May. The OPEC deal has reportedly taken 1.2 million barrels of crude supplies out of the market and if the deal breaks down in June when it officially ends if not extended, there could be a supply war within OPEC resulting in an increased production beyond the 1.2 million barrels cut. In addition to the above, the market is concerned by the fact that the OPEC deal is failing to provide enough cushion to price. The drop in inventory in February and March was 30 million barrels; simply not enough when the global inventory stands at 3.05 billion barrels. To add to the woe, the US production has increased far more rapidly than originally anticipated. Since last July, the production increased by 837,000 barrels per day.

In light of the above fundamentals, we at FxWirePro have revised our outlook in WTI oil price and called on our readers to go short in the commodity around $49.5 area with a target around $43 per barrel in a previous post, named, �FxWirePro: Oil price might decline to $43 per barrel�, available at http://www.econotimes.com/

Here, we show our readers a graphical representation of crude oil price that shows that WTI has failed to break above $54.5 per barrel and a rising trend line is squeezing the range. We suspect, there could be a sell breakout ahead.

WTI is currently trading at $48 per barrel.