Monday, December 12, 2016

Saudi Arabia Cutting More Than Expected Because Oil Needs To Break Out

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*Saudi Arabia said that they plan to make deeper cuts than what they recently agreed to with OPEC.

*While oil has had a big move it could be only just about to break out.

*Saudi Arabia is trying to set up an IPO and is likely trying to take advantage of current oil price momentum.

*Really, they need this breakout. Otherwise the OPEC agreement will end in failure.

It was just reported that Saudi Arabia ("KSA") announced they would cut further below their recently agreed upon OPEC levels. That could cause oil to continue higher which can cause a breakout. Oil trades technically which KSA is well aware. They likely need to push price higher to gain momentum to benefit their upcoming IPO.

Source: Interactive Brokers

It has been widely reported that oil has had a strong move off of its recent lows due to the OPEC agreement. A breakout here would give oil prices further momentum.

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