Bullish and bearish targets on OPEC meeting

Bulls and bears have both been fighting over oil since the month of May this year and the upcoming OPEC meeting might help one of these two to break ahead of the other. While the statistics are favoring the bears, commentaries surrounding the deal have energized the bulls. The Russian President and the energy minister have both weighed in saying that a deal by OPEC member is likely to be reached when they meet in Vienna on November 30th. However, the numbers suggest otherwise. OPEC has set the production ceiling between 32.5 million barrels and 33 million barrels per day, at the Algeria informal meeting. But as of October, OPEC is producing 33.8 million barrels per day and the exempted countries; Iran, Libya, and Nigeria are set to increase their production further. In addition to that, Iraq opposes to any production cut.

With this being the situation, if the OPEC members succeed in not only finalizing the deal but also ways to implement it, the bulls are likely to be cheering. They could cheer even if the production ceiling is set higher like 34 million barrels per day but in such a case a longer time period to adhere to the ceiling must be there preferably five years. But if the OPEC fails to conclude a deal or make one that fails to impress bears are going to have the upper hand.

Price targets:

We suspect, with a successful deal, the price of WTI oil could reach as high as $59 per barrel and then to $68 per barrel, whereas a failure would push prices to as low as $27 per barrel.

For the bulls, the key resistance level is $52 and for the bears, the key support level is at $39 per barrel. WTI is currently trading at $47.9 per barrel and Brent at $1.1 per barrel premium to WTI.