Some of the oil market is still holding out for a deal from Algiers
There's a saying we use over here when talking about someone or something that promises a lot but delivers little. 'All mouth and no trousers' can be applied to what's going on in Algiers right now, and oil traders are seeing that too.
The big day is still tomorrow, and the OPEC meeting that may or may not become something more official than producers chatting over a pint and a packet of crisps. While there seems to be willing participants to a deal, there's also some who aren't. It's really the Saudi and Iran show and any deal between those two looks hard to come by.
For now, Brent is sitting quite happily above the $45 mark but a confirmation that this event could be another load of hot air could mean we see another run to the downside.
Brent daily chart
The $40-50 range is where we look to have found balance for now. The oil bods are looking for balance and the market has said that's where it's happiest right now.
If we don't get any deals by COB in Algiers tomorrow, the early August lows around the low 41's could be in for a visit. If it's real bad news, like we're still very far from a deal, we'll see worse.
If we get some sort of deal, the 51.00/25 area looks to be a spot worth watching for any bullish move petering out.
Brent H4 chart
When using technical analysis on oil you've got to be ready for it to be ignored, so even these levels may not count for anything if we get big news. After any initial reactions, look for your tech levels to have more of a say in things but until then be careful.
Update: Apparently the OPEC meeting is scheduled for 14.00 GMT.
