FxWirePro: Sell WTI targeting $52 per barrel area

WTI is likely to undergo a correction, which could prompt a decline in the North American oil benchmark towards $52 per barrel. Despite OPEC and N-OPEC members agreeing to an extension of the production cut agreement until the end of 2018, WTI has so far failed to move decisively higher. In addition to that, reports on global drawdown on inventories have also failed to provide the necessary boost. Moreover, an oil pipeline shutdown in the North Sea pushed priced higher but temporarily. It affected Brent more than WTI.

All of these above strongly suggests that WTI is likely to undergo a correction to the very least and our calculations suggest a drop towards $58 area.

However, we suspect there could be a spike in WTI in the coming days and weeks, and the price could reach as high as $60 area before falling. Hence we recommend average selling

Trade idea:

Sell (half the desired amount) WTI targeting $52 area at the current price of $57.5 and with a stop loss of $62 per barrel. Sell the rest at a higher price to average the selling price.