Most of the experts are calling the near term reversal has happened in oil. Prices witnessed a bullish break on charts as –
- sentiment was extremely bullish (rightfully so), still whenever sentiment tilts too much on one side it leaves the doors open for a snap back on even the slightest of positive news
- On similar lines, oil is witnessing a revival; courtesy of falling production(especially US and non-OPEC), talk of OPEC and non-OPEC meeting on March 20
Correction could gather pace if –
- OPEC and non-OPEC meet planned on March 20 ends in a unanimous production freeze accord. (allowing for special relaxation for Iran)
- This would trigger expectations of production cut in June OPEC meeting or more coordinated action
So overall, it appears prices are likely to stay on a front foot, unless March 20 meeting is cancelled or ends with no production freeze accord!
Let us see Brent oil daily chart
Assuming the falling trend line has been breached, oil prices could remain on the front foot.Overall, it appears the futures could remain sideways to positive. So as of now, it appears risk assets have little reason to fear.