At this point, the probability of an OPEC production cut must be down to about 5% but buyers continue to step in ahead of the November low of $73.25.
I struggle to see how that level will hold when the announcement is made tomorrow (in thinner liquidity because the US is out).
The risk, for me, is that all the selling is over on the rumor of the announcement. Perhaps we get a brief spike through stops and $73.00 but then the ‘buy the fact’ crowd will step in.
In the bigger picture, I think the trade is oil shorts for the longer term. There’s a game of chicken going on in terms of production and OPEC thinks it can bankrupt US shale producers. A price war might be the story of 2015 and then we’re talking about $50-60 oil.
