Oil has stormed back up the charts after the recent OPEC meeting has yielded some fruit, albeit limited for the time being. So far Iraq has agreed to limit its oil production at around 4.75M – 5.0M barrels per day, which is the first OPEC concession to actually limit supply that we have seen in a long time. I’m myself a sceptic at times of OPEC but it would seem that they have finally managed to make headwind on the subject of oil prices and it will be interesting to see if others follow suit. The market reaction has of course been positive at this new, and this no doubt surprising given that oversupply fears had been one of the major problems for the oil sector and bullish traders in general. This comes on top of a day where even Saudi Arabia and Russia have said that they will both look to limit oil production in an effort to boost prices and bring about stability in the market. However, Russia is a hard one to follow and it will be interesting to see if they will a) stick to an agreement and b) want more concessions from others before even considering it in the first place. The more likely scenario is them freezing output near 11 million barrels a day – a near record high.

The technical’s on the chart are very strong however, and the bulls are looking to get back in control especially with the fundamentals being so strong as of late. It’s now not unthinkable to even consider oil being around the $60 barrel mark come year end. The recent push has so far touched on resistance at 51.53 before slipping back, however with the bulls looking to take control I wouldn’t expect to see this level hold, especially if OPEC gets its way. The next major level up would be at 54.09 with the most major level likely to be found at 60.28, and the level I would struggle to see markets push past this year unless there were very major concessions which seems unlikely with Russia and the majority of non-OPEC nations.

Regardless of the oil all commodities have been bouncing around the charts lately, none more so the silver which fell sharply before recovering on the back of the weaker than anticipated non-farm payroll on Friday. It has so far managed to climb back up the charts and is looking a little worse for wear, failing to even break through the 200 day moving average today. While we did see a double bottom scenario at 17.133 it’s likely it will struggle to hold further momentum unless we see further weakness in the US dollar, or alternatively the global economy struggling. Regardless of this the bears are looking to take a quick swipe back at silver and the recent profit taking will do little to deter them at the end of the day.