FxWirePro: Bulls target $56 per barrel for WTI on Saudi assurance; dissolve short positions, enter long positions

Saudi Arabia’s pledge to curb on exports by almost a million barrels along with Nigeria’s voluntarily imposed ceiling on oil production at 1.8 million barrels per day earlier this week has reversed the course of North American benchmark WTI, which rose sharply in the past two days. The price of WTI has risen by almost 6 percent in the last two days, signaling a decline in the selling pressure.

We would like to recommend profit bookings on the short positions recommended by FxWirePro around $49 per barrel back in May after the OPEC agreement. While WTI had reached our interim target of $42 per barrel, it looks like that it will not be reaching our final target of 438 per barrel in the current run.

While the bearish pressure that began back in 2014 riding on supply glut has not diminished completely, there lie opportunities on the bullish side at least in the short-term.

With a change in short-term outlook, we would like to recommend entering long positions at the current price of $48.4 per barrel and at dips around $47 and $46.5 per barrel, with a stop loss around $42 per barrel and with an initial target around $56 per barrel.

However, we would closely monitor this trade as the long-term bearish pressure is still quite prevalent.